New data shows that smaller metro areas are faring better than cities and multi-family construction is doing better than single-family.
New findings from the National Association of Home Builders’ Home Building Geography Index show the rental market is driving much of the current construction activity in residential building. That means better numbers for multi-family building.
While the association cautioned that the results, from just one quarter, may not signal a broader base trend, they were encouraged by what has occurred so far.
“Builders are finding more opportunities in smaller metro areas, where developable land is generally more available and less expensive,” said NAHB chairman Bill Owens, who is also a home builder and remodeler from Worthington, Ohio. “Outlying counties of small metros posted the largest gain in single-family market share, underscoring how affordability challenges are shaping where new housing can be built.”
“Single-family construction remained under pressure in the second quarter, but the rate of decline improved in six of the seven geographic categories,” said NAHB chief economist Robert Dietz. “Meanwhile, multifamily permit growth suggests a possible geographic shift away from the outlying markets that led growth a year earlier.”
The shift in multifamily construction toward large metro core and suburban counties follows an earlier period of weakness. Compared with the second quarter of 2025, large metro core counties increased their market share by 1.6 percentage points to 35.4 percent, while large metro suburban counties gained 0.5 percentage points to 27.3 percent. Together, they accounted for 62.7 percent of multifamily construction.
