The market share of single-family and multifamily homes built in rural markets increased over the past year, and the growth seems to be accelerating. According to NAHB’s Home Building Geography Index (HBGI), 10.5% of all single-family homes built in Q4 2021 were built in rural areas, up from 10% in Q4 2020. In addition, 6% of multifamily units were built in rural areas compared to just 4.1% a year ago.
In the HBGI, “rural areas&Rdquo;" are defined as “micro counties” and “non-metro/micro counties” designations by the U.S. Census Bureau, the source of the data. In Q4 2021, those counties accounted for about 14% of the U.S. population but the share of home building was 16.5%.
Evolving market conditions were primarily responsible for the market share gains. While the most acute effects of pandemic are waning, a large number of home buyers continue to look outside large metro areas for their homes.
An historic shortage of buildable lots is also prompting builders and developers to look further afield for places to build their communities. The growth over the last year could accelerate, as multifamily permits were up over 90% year-over-year in rural counties in Q4 2021.
NAHB economist Litic Murali provides more analysis in this Eye on Housing blog post.