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Home Building Geography Index (HBGI)

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The Home Building Geography Index (HBGI) is a quarterly measurement of building conditions across the country and uses county-level information about single- and multifamily permits to gauge housing construction growth in various submarkets.

Key Findings in the Q2 2021 HBGI:

  • Single-family home building posted comparable double-digit gains in all seven regional submarkets.
  • Core counties of metro areas experienced considerable shrinking of their market shares of total multifamily residential construction activity – from 40.2% in Q1 2021 to 38.7% in Q2 2021.
  • Multifamily growth rates were moderately higher in counties that had more affordable housing, which was also evident in the previous quarter.
  • In the ongoing pandemic, the most- and least-affordable counties lost market share in single-family home building to counties that placed in the middle three quintiles of housing affordability, dropping from 50.9% in Q4 2019 to 48.3% in Q2 2021.

Download the data file of the full HBGI findings here.

Featured Category for Q2 2021: Least-Affordable and Most-Affordable Counties

In addition to its usual, region-level classification of counties, the HBGI is featuring for Q2 2021 a new segmentation of the housing market based on measures of housing affordability using the ratio of the median value of all owner-occupied housing units in a U.S. county, relative to the median income of all residents in that county, as reported in the 2019 5-year American Community Survey. The housing market is then delineated into five submarkets of varying affordability, with each submarket defined as a quintile of all U.S. counties’ price-to-Income ratios.

Total population for the least-affordable counties: 161 million; 49.9% of total U.S. population

Total population for the most-affordable counties: 9 million; 2.8% of total U.S. population

We observed the following in the least-affordable counties (Top Price-to-Income quintile):

  • 47.6% of single-family construction for 2Q21
  • 11.1% single-family quarterly growth rate for the 2Q21
  • 46.3% single-family year-over-year growth rate (2Q21 vs 2Q20)
  • 25.8% single-family 4-quarter MA of the year-over-year growth rate

And in the most-affordable counties (Bottom Price-to-Income quintile):

  • 0.7% of single-family construction for 2Q21
  • 43.9% single-family quarterly growth rate for the 2Q21
  • 29.9% single-family year-over-year growth rate (2Q21 vs 2Q20)
  • 22.4% single-family 4-quarter MA of the year-over-year growth rate

In multifamily, the trends in the least-affordable counties (Top Price-to-Income quintile) were:

  • 68.0% of multifamily construction for 2Q21
  • 8.2% multifamily quarterly growth rate for the 2Q21
  • 27.0% multifamily year-over year growth rate (2Q21 vs 2Q20)
  • 4.0% multifamily 4-quarter MA of the year-over-year growth rate

And in the quintile for the most-affordable counties (Bottom Price-to-Income quintile):

  • 0.4% of multifamily construction for 2Q21
  • 18.3% multifamily quarterly growth rate for the 2Q21
  • 88.9% multifamily year-over year growth rate (2Q21 vs 2Q20)
  • 48.3% multifamily 4-quarter MA of the year-over-year growth rate

Regional Building Growth Conditions

Starting with the first quarter of 2019, when the Home Building Geography Index was first unveiled, NAHB classified all counties in the U.S. as one of seven regional categories based on population density and regional location. For each area, NAHB tracked single-family and multifamily growth rates (not seasonally adjusted) and market shares. These categories include:

The Home Building Geography Index is the successor to the Leading Market Index (LMI), whose tracking is no longer maintained. The LMI used single-family housing permits, employment, and home prices to measure proximity to a normal economic and housing market. It was calculated for 337 local markets, metropolitan statistical areas (MSAs), as well as the entire country. View an archive of LMI data with its original methodology.

Update to County Populations

Beginning with the second quarter of 2020, NAHB updated the HBGI to use county population estimates from the 2018 5-year American Community Survey (ACS), as opposed to those from the 2016 5-year ACS. This necessitated a reclassification of county-level regional assignments, based on population density-based delineations. The number of counties that changed their urban classifications in large metro areas was minimal. Most of the regional reclassifications occurred to areas of lower population density. Of the 3,142 counties in the original HBGI, less than 140 counties changed regional classification. There were an additional twenty-three counties in Virginia and two counties in Hawaii that had not been classified previously and were combined with other counties per delineations provided by the Bureau of Economic Analysis. With the new Virginia and Hawaii county delineations, the total number of counties in the HBGI is 3,113.

These new population figures will be applied in forthcoming analyses until later years’ ACS population data become available and implemented, for which there will be announcement.