The National Association of Home Builders (NAHB) recently released its latest quarterly Home Building Geography Index (HBGI). The report highlighted the effects that the current COVID-19 pandemic is having—and will most likely have in the future moving forward—that being an uptick and increased amount of residential construction activity in lower \-density markets especially. Such markets include smaller cities and more rural locales.
This can be seen as a direct result of the pandemic, with COVID-19 hitting the nation’s most populated, big metropolitan cities, wreaking havoc and causing a plethora of challenges for current residences. The biggest difficulties that became factors in the face of the pandemic, thus leading to this shift toward big-city residents now seeking to reside further out in less-dense communities include crowded living conditions, dependency on mass transit, and insufficient health and public sector infrastructure.
Additionally, COVID-19 continues to spread to more dense areas, the collateral damage continues to pile up, such as the majority of non-essential businesses closing, the bludgeoning of the economy, and dramatically declining housing demand as residents flee to more suburban areas.
Also, according to the HBGI, even though we are now seeing a huge and rapidly accelerating uptick in housing demand and home construction activity in the suburbs and less dense areas, this is not necessarily a new thing. In fact, the HGBI indicates that this trend has been going on for some time, but simply shifted into high gear as COVID-19 hit the scene.
Specific statistics gleaned from the HBGI revealed that while single-family single-family construction expanded across all seven HBGI-tracked economic geographies, it was the outlying suburbs of small metro areas that experienced the highest growth rate—an impressive 9.1% to be exact (on a one-year moving average).
The experts predict that this trend of migration toward the outer lying areas will continue following COVID-19’s wake.