Single-Family Construction Down in Large Metros, Up in Rural Areas

Strategic Insights -

The National Association of Home Builders (NAHB) reported that single-family construction declined in nearly every geographic region in the second quarter of 2025, with the largest percentage drop of 3.8% occurring in large metro, suburban counties. Despite this, multifamily output posted growth in most markets, with small metro outlying counties recording a 22.1% increase. Affordability challenges, high mortgage rates, and regulatory costs continue to hinder single-family production.

Key Takeaways:

  • Single-family construction declined in nearly every geographic region in the second quarter of 2025, with a 3.8% drop in large metro, suburban counties.
  • Multifamily output posted growth in most markets, with small metro outlying counties recording a 22.1% increase.
  • Affordability challenges, high mortgage rates, and regulatory costs continue to hinder single-family production.
  • The NAHB Home Building Geography Index (HGBI) showed a 1.8% gain in micro counties, marking the fifth straight quarter of construction growth.
  • Non-large metro counties posted their highest combined market share since the first quarter of 2023, holding 50.2% of single-family market share in the second quarter of 2025.
  • Large metro core counties recorded a 12.3% decline in multifamily construction, marking the ninth straight quarterly decline.

Statistics:

  • 3.8%: The largest percentage drop in single-family construction in large metro, suburban counties.
  • 22.1%: The increase in multifamily construction in small metro outlying counties.
  • 50.2%: The combined market share of non-large metro counties in single-family market share in the second quarter of 2025.
  • 1.8%: The gain in micro counties in the second quarter of 2025, marking the fifth straight quarter of construction growth.
  • 4.3%: The share of multifamily construction in large metro outlying counties.
  • 29.3%: The share of multifamily construction in small metro core counties.

Sources:

  • NAHB Home Building Geography Index (HGBI) for the second quarter of 2025.
  • National Association of Home Builders. (2025, September 2). Single-Family Construction Down in Large Metros, Up in Rural Areas.