New Single-Family Construction Slowed in Q1, Says NAHB
Washington, DC, June 8, 2022-New findings from the National Association of Home Builders (NAHB) Home Building Geography Index (HBGI) show that the rate of year-over-year single-family construction growth in small and large metro urban, suburban and rural regional submarkets slowed in the first quarter of 2022 compared to the same time period as last year, with notable deceleration in large suburban markets. In contrast, multifamily growth in large population centers has rebounded from negative growth rates and posted sharp gains during the same time period.
“As the year has progressed, we have seen signs of an increasing slowdown in the single-family market,” said NAHB chairman Jerry Konter, a home builder and developer from Savannah, Georgia. “Ongoing building material production bottlenecks have delayed or stalled home building projects, construction labor shortages are running near an all-time high of 400,000 workers and more recently the rapid runup in mortgage rates have all combined to exacerbate the housing affordability crisis.”
“Single-family growth rates have slowed in nearly all regional submarkets over the past year due primarily to rising construction costs that have seen building material costs rise 19% year-over-year,” said NAHB chief economist Robert Dietz. “The more pronounced drop in growth for the large suburban markets is due to the easing of the rapid shift of home buyer preferences for the suburbs in the aftermath of the COVID-19 pandemic.”
On the multifamily front, Dietz noted that apartment construction growth is far outpacing single-family building in all regional geographies. “Low rental vacancy rates and rising rents give multifamily developers confidence to continue building despite rising costs for land, labor and materials,” he said.