Multifamily Construction Gaining Market Share in Low Density Markets

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In the last analysis of NAHB’s Home Building Geography Index (HBGI), single-family construction was shown to be expanding faster in regions of lower population density. The COVID-19-induced public health crisis has added momentum to this trend.

Moreover, multifamily residential construction has been on a similar trajectory of growth that intensified in 2019, regardless of the virus impact. Indeed, over the past year, apartment construction growth in less dense markets has outpaced expansion in larger metropolitan areas, leading to changes in apartment construction market share.

The above figure shows that the shares of multifamily construction in lower density areas increased since the first quarter of 2016, the first quarter of data for the HBGI.1 Moreover, the change in market shares accelerated during 2019. This trend is likely to continue as housing leads the U.S. economic recovery from the coronavirus-induced slump, albeit with changed housing demand reflecting a preference for lower-density markets.

A forthcoming analysis of the 2020 first quarter HBGI data will feature a new segmentation of the housing market, those counties that rank in the top 25% of employment share in Education and Health Services sector. The focus on this sector is pivotal to the current state of affairs in the United States.


Notes:

  1. The HBGI is the successor to the Leading Market Index one of whose three component factors returned to pre-recession levels by the end of 2015. Therefore, it was deemed necessary to phase the LMI out, beginning with the first quarter of 2016.


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5 replies

  1. I own a residential development in rural Colorado. I am looking for a contractor,developer,investor wanting to build homes. Also in need of multi-family units here. We have limited housing on the market and new people moving into town looking to buy. Building sites are very affordable,I am open to most any offer.

    • HI Diane.

      I would like to hear more. I work for a national builder and we build affordable homes nationwide. But also have investors looking for these opportunities. Please contact me.

      • Hello Matt,

        Thank you for your reply. Send me a email or phone number where I can reach you.

        I own both a Affordable Housing Development with all city utilities on each lot with roll over curb and gutter,all you need is a house. I also have 2 properties for multi family units, one is being looked at by another national company as well, but I don’t have a contract yet. I can explain more when we talk.

        Hope we can talk soon.

      • I can be reached at Dianecvh@ mindspring.com

      • Hi Matt,

        Are you still here? How can I reach you?

        Diane

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