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. The Q1 2022 rollout of the HBGI focuses on the population density-based delineation of home building that has been the mainstay of the HBGI.

The latest findings indicate an increased slowdown in the single-family market with multifamily home building far outpacing it. The more pronounced growth reduction of single-family home building in large suburban markets owes to the rapid shift in home buyer preferences. Overall, all single-family home building’s regional submarkets have been subject to rising construction costs resulting from building material costs, which have risen 19% year-over year.

Key findings from the Q1 2022 HBGI

The four-quarter moving average of single-family growth rates:

  • fell the sharpest in large metro suburban counties, from 18.7% in the first quarter of 2021 to 5.2% in the first quarter of 2022;
  • marginally slowed in large metro core counties, from 9.5% in the first quarter of 2021 to 8.8% in the first quarter of 2022; and
  • increased in only one region: micro county – small towns, rising 3.9% to 16.7%.

Additionally, between the first quarter of 2021 and the first quarter of 2022, lower density areas captured 1.6% of large and suburban counties’ single-family home building market share.

Download the data file of the full HBGI findings here.

Regional Building Growth Conditions

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.

The Home Building Geography Index is the successor to the Leading Market Index (LMI), whose tracking is no longer maintained.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.