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 Q3 2021 HBGI:

  • Home building in higher-density markets is beginning to make a comeback, even as the suburban shift for single-family home buying spurred by the pandemic continues.
  • Market share for multifamily construction shows a significant increase in smaller cities and rural areas, while the pace of new permits is easing in larger metropolitan markets.
  • Strong growth of residential construction was recorded in counties with a high concentration of second homes.
  • Download the data file of the full HBGI findings here.

Featured Category for Q3 2021: Second-Home Counties

In addition to the HBGI’s region-level classification of counties, the Q3 2021 HBGI features new analysis of counties with a high concentration of second homes (revisiting the featured category of Q3 2020). A “second home” is classified as a non-rental property that is not designated as a taxpayer’s principal residence. High-concentration second-home counties are defined as those that have more than 15% of their housing units serving such a function.

Single-Family Construction

  • 10.8% of single-family construction for 3Q21
  • -8.2% quarterly growth rate for the 3Q21
  • 19.9% year-over-year growth rate (3Q21 vs 3Q20)
  • 36.1% four-quarter MA of the year-over-year growth rate

Multifamily Construction

  • 4.7% of multifamily construction for 3Q21
  • 13.3% quarterly growth rate for the 3Q21
  • 73.2% year-over year growth rate (3Q21 vs 3Q20)
  • 24.7% four-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The Home Building Geography Index is the successor to the Leading Market Index (LMI), whose tracking is no longer maintained.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.