The COVID-era shift of Americans seeking out less crowded areas for their new homes appears to be continuing, according to new data from the National Association of Realtors.
“Housing demand continued to show the strongest gains in lower density markets in the first quarter as people have flexibility to live further out and even outside some metro areas,” said NAHB chairman Chuck Fowke, a custom builder from Tampa, parsing the organization’s Home Builders Geography Index, released in late May.
The data bear out his analysis:
• For single-family home building, the market share for large “metro-core” counties declined from 18 percent in the first quarter of 2020 to 16.9 percent in the first quarter of 2021.
• Outlying counties (outer suburbs) of large and small metros expanded from 17.2 percent to 17.9 percent.
Outer suburbs of small metros posted the strongest growth rates for single-family construction over the last four quarters (21.7 percent) while large metro core areas exhibited the slowest growth rate (9.7 percent).
Buyers may also be going where they are welcomed and find it easier to build, Fowke said.
“Given the regulatory burdens and lack of lots in higher-density, higher-cost markets, builders are better able to meet demand in suburban, exurban and rural areas because of the lower cost to build,” he said.
(Although, given recent upticks in material costs and a need for new workers in the industry, prices are moving higher all over the country.)
The survey also found that new-housing construction was doing best in areas with relatively fast commutes. It’s not a particular surprise, given that while some workers will retain flexibility to do their jobs from home, even if most will be expected back in the office at least part of the time.
Nationally, the average commute time between home and work is 26 minutes.
While there still continues to be significant construction in areas with longer commutes, construction rates for the first quarter of 2021 were strongest in areas with lower commuting times.
In apartment construction, the trend was even more pronounced, with long-commute areas seeing less building and short-commute localities benefiting.