Evidence of a “suburban shift” in consumer home-buying preferences as a result of the COVID-19 pandemic can be found in the second-quarter National Association of Home Builders (NAHB) Home Building Geography Index (HBGI).
The HBGI is a quarterly measurement of building conditions across the country, and uses county-level information about single- and multi-family permits to gauge housing-construction growth in various urban and rural regions.
“The increasing demand for construction in more suburban neighborhoods is being driven in large part by the coronavirus outbreak,” said NAHB chairman Chuck Fowke, a custom home builder from Tampa.
“The growing trend for working at home is enabling more families to choose to live in lower-cost, lower-density communities,” Fowke said. “Moreover, persistent housing-affordability challenges exacerbated by soaring lumber prices that have added $16,000 to the price of a single-family home since mid-April are adding to the need to find affordable housing in lower-cost markets.”
“The county-level second-quarter HBGI data shows relative growth in lower-density markets that represent half of all single-family construction,” said NAHB chief economist Robert Dietz.
“We saw initial evidence of this trend in the first quarter, and in recent months these markets have registered faster growth for both single-family and multi-family building, as the demand for new construction shifted to more suburban and exurban communities,” Dietz said.
Small metro suburbs accounted for the fastest growing geographical areas for single-family construction during the second quarter, up 10.6 percent on a four-quarter, moving-average basis.
This was followed by small towns (9.3 percent), small metro core areas (7.5 percent) and exurbs (5.6 percent).
In the second quarter, single-family housing starts fell by 24 percent on quarterly basis.
Of the seven regional geographies, only small metro-area suburbs posted a year-over-year gain in this quarter, while the others registered declines, the biggest of which occurred in large metro core areas.