Depending on the property type and the location, new construction overall picked up during Q2 2021.
Multifamily Construction Increased the Most in Smaller Cities and Suburbs
According to the latest data from the National Association of Home Builders (NAHB) and the Home Building Geography Index, multifamily construction increased +14.3% y/y in small metro urban core areas and by +25% in small metro suburban areas.
There was also an uptick of +20.5% in multifamily construction in “micro counties” or small towns.
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Pace of Multifamily Construction in Large Metros Slowed in Q2 2021
The NAHB believes these increases in multifamily construction in smaller places reflects a demographic shift towards affordability, areas with less population density, remote working, and seemingly boundless rising home prices.
Litic Muralio, NAHB economist, said, “Large metro core areas recorded a -0.5% y/y decline (in new construction), reflecting the ongoing virus crisis’s baneful effects on housing in core counties of major metropolitan areas that started over a year ago.”
Multifamily residential construction fell in core counties of large metro areas from 40.2% in Q1 to 38.7%.
That said, large metro regions still account for 64.7% of all multifamily construction activity despite multifamily construction activity picking up in smaller cities, outlying counties and in small towns.
Breakdown of Multifamily Housing Share
- Large metro-core county – 38.7%
- Large metro – suburban county – 26.0%
- Large metro – outlying areas – 3.4%
- Small metro – core county – 22.9%
- Small metro – outlying county – 4.0%
- Micro county – 3.5%
- Non metro-metro county – 1.5%
Thanks to National Association of Home Builders, Home Building Geography Index and National Mortgage News.