New Home Construction on the Decline as Conditions Worsen, NAHB Reports
Originally published on December 6, 2022, by Stephanie Pagan and Elizabeth Thompson for the National Association of Home Builders.
The big jump in single-family home building activity that occurred in the aftermath of the COVID-19 pandemic in large metro outlying counties and exurban areas has shown a marked decline over the past 12 months, according to the latest findings from the National Association of Home Builders (NAHB) Home Building Geography Index (HBGI) for the third quarter of 2022.
“The single-family construction slowdown is not just limited to regions of the country that experienced the fastest production growth over the past year,” said NAHB Chairman Jerry Konter, a home builder and developer from Savannah, Ga. “Home building activity has slowed in nearly all regions and large and small metro markets as high mortgage rates, elevated inflation and stubbornly high construction costs act as a drag on consumer demand and housing affordability.”
“While the bulk of single-family construction continues to occur in the South and lower density markets where job conditions are more favorable and housing costs are lower, the data clearly show these areas are acting as a leading indicator for the entire housing market,” said NAHB Chief Economist Robert Dietz. “They are registering the largest production declines, even as other regions—including large metro core and suburban counties—are also displaying weakness as the national housing market has fallen into a recession due to rising mortgage rates and a slowing economy.”