HBGI: Single-family construction grows in Q4 2024

According to the most recent National Association of Home Builders Home Building Geography Index (HBGI), the persistent scarcity of existing homes for sale has aided in the growth of new single-family building across all regions.

Despite persistent challenges that continue to impact housing affordability, such as a scarcity of buildable lots, rising building costs, and a skilled labor shortage, single-family development increased in all four quarters of 2024.

Multifamily construction remained poor, however there was modest growth in lower density areas.

Single-Family

After peaking in the second quarter, all HBGI-tracked geographies continued to rise in the fourth quarter.

The HBGI is based on permit data, which has continued to show larger volumes than the previous year despite ongoing structural difficulties in residential development.

Among the HBGI regions, small metro core counties experienced the most growth in the fourth quarter of 2024, increasing 10.3% year on year on a four-quarter moving average (4QMA).

Non-metro/micro counties had the slowest growth rate, increasing by only 4.8% year on year (4QMA).

In terms of market share, single-family building was concentrated in small metro core county areas, accounting for 29.1% of the total. Non-metro/microcounty areas continued to have the smallest single-family construction market, accounting for 4.2% of the total.

Multifamily

Multifamily development continued to increase at a negative rate throughout the major markets, with large metro core county regions declining by 13.5% in the fourth quarter (4QMA).

While permits for new multifamily building remain low, there were some encouraging indicators in less densely populated areas.

Small metro outer county regions experienced the highest growth rate in the fourth quarter, at 9.0%, marking the second consecutive quarter of increase.

These localities account for approximately 5.0% of the entire multifamily development market.

The fourth quarter of 2024 HBGI data along with an interactive HBGI map can be found at http://nahb.org/hbgi.

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