The National Association of Home Builders’ HBGI Find Surprising Results
The quarterly NAHB Home Building Geography Index (HBGI), released the first of this month, shows that home building throughout the country has increased in areas with the shortest commute times. The HBGI also shows the suburban shift in new home construction to low density, low cost markets stemming largely from the COVID-19 pandemic and first reported in the second quarter of 2020 continued into 2021.
“The first quarter HBGI indicates that home building not only continued to overperform in lower cost markets like suburbs and exurbs, but also expanded the most rapidly for single-family and multifamily construction in areas with the shortest commutes,” said NAHB Chief Economist Robert Dietz. “As workplaces increasingly adopt hybrid work models for roughly 30-40% of the American workforce, renters and buyers will have increased market power to minimize travel times and reduce both housing and transportation cost burdens.”
Nationwide the average commute is around 26 minutes. For single-family homes, this quarter construction growth rose in areas with the shortest commuting times. The index data showed a four-quarter moving average year-over-year growth rates of 22.2%.
The study discovered that for single-family home building there was an 18% decrease from the first quarter of 2021 in the market share for large metro core counties. The data found an increase from 17.2% to 17.9% in outlying counties of large or small metro areas.
“With the shift to telework brought on by the COVID-19 pandemic, housing demand continued to show the strongest gains in lower density markets in the first quarter as people have flexibility to live further out and even outside some metro areas,” said NAHB Chairman Chuck Fowke. “Given the regulatory burdens and lack of lots in higher density, higher cost markets, builders are better able to meet demand in suburban, exurban and rural areas because of the lower cost to build.”
