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 Q1 2021 HBGI:

  • For single-family home building, the market share for large metro core counties declined from 18% in the first quarter of 2020 to 16.9% in the first quarter of 2021.
  • Outlying counties (outer suburbs) of large and small metros expanded from 17.2% to 17.9%.
  • Outer suburbs of small metros posted the strongest growth rates for single-family construction over the last four quarters (21.7%) while large metro core areas exhibited the slowest growth rate (9.7%).
  • For multifamily, the impact was even more significant; the combined market share for large core and suburban counties declined from 67% to 63.4% between the first quarter of 2020 and the first quarter of 2021.
  • Over the same period, small metros (core and suburbs) saw gains for apartment construction from 24.7% to 27.1%, as multifamily development moved to lower density areas.

Download the data file of the full HBGI findings here.

Featured Category for Q1 2020: Longest and Lowest Commuting Counties

Total population of the Longest Commuting counties: 117 million (36.2% of the total U.S. population)

Total population of the Lowest Commuting counties: 16 million (5.0% of the total U.S. population)

The Q1 2021 rollout of the HBGI, in addition to its usual, Region-level classification of counties, features a new segmentation of the housing market based on counties’ mean commuting times to workers’ places of employment, based on reported findings from the 2018 5-year American Community Survey. We segment the housing market into five submarkets, each representing an approximate quintile of the counties’ mean commute times:

  • 28 minutes or more: Longest Commute Time
  • 24-28 minutes: Higher Commute Time
  • 22-24 minutes: Medium Commute Time
  • 18-22 minutes: Lesser Commute Time
  • 18 minutes or less: Lowest Commute Time

The HBGI’s foray into commuting-related data this quarter also features delineations of the housing market based on calculated work-from-home percentages and bicycle commuting percentages, also derived from the 2018 5-year American Community Survey. Those results can be viewed in the HBGI data supplement.

We observed the following in the Longest Commuting counties:

  • 31.6% of single-family construction for 1Q21
  • 5.1% single-family quarterly growth rate for the 1Q21
  • 25.7% single-family year-over-year growth rate (1Q21 vs 1Q20)
  • 17.4% single-family 4-quarter MA of the year-over-year growth rate

And in the Lowest Commuting counties:

  • 4.3% of single-family construction for 1Q21
  • -2.8% single-family quarterly growth rate for the 1Q21
  • 34.4% single-family year-over-year growth rate (1Q21 vs 1Q20)
  • 22.2% single-family 4-quarter MA of the year-over-year growth rate

In multifamily, the trends in Longest Commuting Counties were:

  • 35.6% of multifamily construction for 1Q21
  • -9.3% multifamily quarterly growth rate for the 1Q21
  • -2.7% multifamily year-over year growth rate (1Q21 vs 1Q20)
  • -14.6% multifamily 4-quarter MA of the year-over-year growth rate

And in the Lowest Commuting Counties:

  • 4.6% of multifamily construction for 1Q21
  • -22.3% multifamily quarterly growth rate for the 1Q21
  • 9.6% multifamily year-over year growth rate (1Q21 vs 1Q20)
  • 24.2% multifamily 4-quarter MA of the year-over-year growth rate

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:

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.

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.