Rural areas are gaining single-family and multi-family market share in 2021

Single-family and multi-family home construction market shares in rural submarkets, as defined by NAHB’s Housing Construction Geographic Index (HBGI), increased year-over-year in the fourth quarter of 2021. The HBGI defines rural areas as including “micro counties” and “non-metro/micro counties,” which represent 8.4% and 5.6% of the total U.S. population, respectively.

Until the third quarter of 2021, the market share of construction of single-family homes in rural areas was consistent with the market shares maintained since 2017, 10.1%. In the third and fourth quarters, it posted quarterly gains of 0.2 percentage points, ending the year at 10.5%. In the fourth quarter of 2020, the share was 10.0%. The growth rate for single-family home construction in the fourth quarter of 2021 in rural counties was 15.9% over four quarters, on a year-over-year rolling average. Its components, micro counties and non-metro/micro counties grew 22.8% and 19.5%, respectively, by the same measure.

Market share gains in multi-family home construction in 2021 were unprecedented in the HBGI, reaching its largest market share on the HBGI record of 6.1% in the fourth quarter. In the fourth quarter of 2020, it was 4.6%. Rural multi-family home construction market shares have shown more volatility in general than their single-family counterparts. Compared to all submarkets, micro counties’ market share of 4.1% in Q4 2021 was double that of non-metro/micro counties. In micro-counties, permit issuances nearly doubled, resulting in a growth rate of 91.2%. The overall rural market growth rate in multi-family home construction was 71.0%.

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