Single-family construction is continuing to retreat across most of the country, with one notable exception: low-density, low-population micro counties, which extended their run as the lone growth market for detached home building, according to the National Association of Home Builders' latest Home Building Geography Index (HBGI).
For the seventh consecutive quarter, micro counties were the only geography to post an increase in single-family construction, rising 1.6% year-over-year on a four‑quarter moving average basis, while every other market category recorded declines. The steepest pullback once again occurred in large metro core counties—the densely populated central counties in metropolitan areas with populations of more than one million—where single‑family construction fell 12.8%.
That pattern marked a sharp reversal from conditions a year earlier, when single‑family building was expanding across all market types. NAHB attributed the shift to a combination of persistent affordability challenges and broader economic uncertainty that weighed on buyers and builders throughout 2025.
Where single‑family growth is still occurring
Micro counties—defined as micropolitan areas built around small towns of roughly 10,000 to 50,000 residents—have become the only consistent growth market for single‑family construction, with gains registered in every quarter going back nearly two years. These sparsely populated counties are benefiting from lower land and construction costs and from households' ongoing search for more space at relatively attainable price points, NAHB said.
In terms of market share, small metro core counties remained the largest geography for single‑family construction at the end of 2025, accounting for 29.4% of activity. Non‑metro/micro counties, by contrast, were the smallest slice of the single‑family market, holding a 4.5% share. Large metro core counties saw the deepest erosion, with their share slipping by one percentage point over the year to 15.1%.
Micro counties also posted the largest single‑family market share gain over 2025, adding 0.6 percentage points compared with 2024 as construction activity increasingly shifted toward these smaller, lower‑density locations. Small metro core counties added 0.3 percentage points of share, while large metro core counties lost 1.0 percentage points over the same period, underscoring the ongoing tilt away from the most expensive, highest‑density urban centers.
Multifamily growth broadens out
The multifamily side of the market painted a much different picture, with construction increasing in every geography for the first time in more than two years. Matching the single‑family pattern, the strongest multifamily gains were again found in micro counties, where activity climbed 14% on a four‑quarter moving average basis in the fourth quarter. Small metro outlying counties—areas on the edge of small metropolitan regions—recorded the next‑highest growth rate at 11.6%.
The weakest multifamily expansion occurred in large metro outlying counties, which posted a 1.9% gain, even as those areas continued to lose market share throughout the year. Large metro outlying counties' share of multifamily construction fell from 4.7% in the fourth quarter of 2024 to 3.7% at the end of 2025, the largest market‑share loss among the tracked geographies.
Large metro core counties remained the single biggest market for multifamily construction, with a 35.1% share in the fourth quarter. That share rose noticeably over 2025 from 33.3% in the first quarter, reflecting the continued strength of rental demand in high‑density urban cores even as single‑family building in those same areas came under pressure. Small metro core counties saw the largest multifamily market‑share gain over the year, picking up 0.6 percentage points.
NAHB noted that the "new status quo" for multifamily remains elevated levels of construction in smaller, less‑densely populated areas, a pattern that has become more entrenched as affordability strains push both renters and for‑sale buyers to look beyond the largest metros.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.