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Construction of single-family homes continued to overperform in suburbs, exurbs and rural communities while lagging in larger urban areas, according to new fourth-quarter-2020 data from the National Association of Home Builders (NAHB).
The trend is a direct result of the pandemic, NAHB officials say; as more workers were able to telecommute and preferences shifted favoring larger homes, these changes prompted buyers and renters to seek out more affordable markets in order to accommodate home offices, home gyms and specialty rooms.
Fourth quarter data from NAHB’s Home Building Geography Index reveal a clear shift:
• Outlying counties of smaller metro areas experienced a 20.7-percent growth rate for the year;
• Small metro core areas posted a 15.7-percent annual growth rate;
• Large metro suburbs registered a 15.1-percent yearly gain; and
• Large metro core areas (close-in residential areas) posted the slowest gain, with just a 9.1-percent growth rate.
“Over the past three quarters, the HBGI data has revealed a measurable shift in home building from more costly, large metro areas to more affordable markets,” said NAHB chief economist Robert Dietz.
And part of that change could end up being permanent.
“We expect only a partial reversal of these trends this year as nationwide vaccination efforts significantly ramp up in the months ahead,” Dietz said. Nationally, the median sales price of a new home in most recent NAHB data stood at $346,757. In the Washington region, the median new-home price was $463,972.
Affordability remains a key concern, as the gap between home-value growth and income growth is widening.
“Policymakers need to address rising regulatory burdens and sharp increases in lumber and other building material prices that are harming housing affordability,” said Chuck Fowke, a custom homebuilder from Tampa and chairman of the National Association of Home Builders.