Large Metro Core Counties Drive Drop in Single-Family Market Share

Single-family construction remained soft across most geographic areas in the second quarter of 2026, as rising building material costs, elevated interest rates and economic uncertainty continued to weigh on the industry. By contrast, multifamily construction strengthened in most regions, supported by solid rental housing demand, according to the latest findings from the National Association of Home Builders (NAHB) Home Building Geography Index (HBGI).

Even so, the second-quarter data showed the contraction in home building eased from the previous quarter, with single-family growth rates improving broadly despite remaining negative.

“Builders are finding more opportunities in smaller metro areas, where developable land is generally more available and less expensive,” said NAHB Chairman Bill Owens, a home builder and remodeler from Worthington, Ohio. “Outlying counties of small metros posted the largest gain in single-family market share, underscoring how affordability challenges are shaping where new housing can be built.”

“Single-family construction remained under pressure in the second quarter, but the rate of decline improved in six of the seven geographic categories,” said NAHB Chief Economist Robert Dietz. “Meanwhile, multifamily permit growth suggests a possible geographic shift away from the outlying markets that led growth a year earlier.”

The sharpest second-quarter decline in single-family home construction was in large metro urban core counties, which fell 13.9%, marking the fifth straight quarterly decline. Still, the drop was less severe than the previous quarter’s 15.8% decline. Overall, single-family construction in non-rural areas, including counties in small and large metros, declined 7.3%.

Small metro outlying counties moved in the opposite direction, rising a modest 0.9% after four consecutive quarterly declines. While one quarter of limited growth may not signal a sustained rebound, it improved from a 1.4% decline in the previous quarter and a 1.3% decline a year earlier. Overall, rural areas declined 0.8%.

With the steepest declines centered in large metro core counties, the geography of single-family construction continued shifting toward smaller, less densely populated markets. Large metro core counties posted the largest market share loss, down 1.3 percentage points in the second quarter of 2026 to 14.6%. Outlying counties of smaller metros recorded the largest gain, up 0.8 percentage points.

The second-quarter HBGI shows the following single-family home building market shares:

• 14.6% in large metro core counties
• 24.0% in large metro suburban counties
• 9.4% in large metro outlying counties
• 29.4% in small metro core counties
• 10.9% in small metro outlying areas
• 7.1% in micro counties
• 4.5% in non-metro/micro counties

Multifamily Construction Gains in Most Regions

By contrast, multifamily construction expanded in six of the seven geographic categories in the second quarter, though momentum varied widely by market. Large metro core counties rebounded, rising 11.6% year-over-year.

A similar pattern emerged in small metro counties, where momentum appeared to cool in the second quarter of 2026. In non-metro micro counties, growth appeared to pick up again, reaching 10.3%—the second-highest growth rate among the geographies.

Market share data point to a shift in multifamily construction toward large metro core and suburban counties following an earlier period of weakness. Compared with the second quarter of 2025, large metro core counties increased their market share by 1.6 percentage points to 35.4%, while large metro suburban counties gained 0.5 percentage points to 27.3%. Together, these two geographies accounted for 62.7% of multifamily construction.

The second-quarter HBGI shows the following multifamily home building market shares:

• 35.4% in large metro core counties
• 27.3% in large metro suburban counties
• 3.3% in large metro outlying counties
• 24.3% in small metro core counties
• 5.0% in small metro outlying areas
• 3.5% in micro counties
• 1.2% in non-metro/micro counties