Homebuilding Slowing, Especially in High-Density Neighborhoods
Since the pandemic, lower-density areas have seen more activity, according to NAHB geography index.
The geography of home building has shifted over the last two and half years, with more single-family and multifamily construction occurring in lower-density markets, according to the Home Building Geography Index released this week by the National Association of Home Builders.
NAHB chief economist Robert Dietz said in the release that the shift was first caused by the initial impact of COVID-19 on housing demand, which favored lower-density neighborhoods.
“The shift continued in recent months due to housing affordability conditions that are causing both prospective renters and buyers to expand their geographic search for housing, aided by hybrid work patterns that allow for a combination of remote and office work.”
He said housing affordability declines in high-cost and highly regulated areas and rising interest rates are also factors.
In NAHB’s June index, small towns were the only area that posted an increase in growth.