- Single-family permit issuance is up in all regions, with the highest growth in large metro cores and suburbs, thanks to affordable housing in less populated areas.
- Multifamily construction and permit issuance slowed down, largely due to challenges like rising interest rates, worker shortages, and supply chain issues.
- Construction of townhouses and new single-family homes was especially strong in suburban areas, where telework-friendly lifestyles and affordability are driving demand.
According to a new report from the National Association of Home Builders (NAHB), Q2 saw a notable uptick in single-family permit issuance and construction nationwide, led by growing suburbs and high-density urban cores.
Meanwhile, multifamily construction and permits saw the opposite situation play out.
Suburban Lead
The NAHB’s Home Building Geography Index revealed that suburban and higher-density urban areas are seeing the highest rates of single-family growth.
Large metro core counties—mainly suburban zones—accounted for 16% of new single-family construction, signaling that teleworking trends are still encouraging movement to more affordable regions.
Overall, 25% of new single-family constructions came from large metro suburban counties, while 29% came from smaller metro core counties.
Multifamily Hurdles
In contrast, the multifamily housing market suffered a downturn during the quarter. The NAHB’s Multifamily Production Index dropped to 44 in Q2, a 12-point slide from the previous year.
Multifamily construction was concentrated in large metro core counties, making up 40% of new development. However, tight financing, higher inventory levels, and declining permit issuance are all creating obstacles.
Second-Home Strength
Both single-family and multifamily development performed well in “second-home areas,” where at least 10.3% of the housing stock consists of second homes. Hamilton County, NY, leads the nation with 75.3% of its housing stock categorized as second homes.
