The NAHB says home builders continue to be impacted by high interest rates and higher material costs.
Higher interest rates and rising building material costs have hammered single-family construction following market highs during the pandemic.
But the slowdown is less pronounced in lower-density markets while multifamily market growth has remained strong throughout much of the nation.
Those are the latest findings from the National Association of Home Builders (NAHB) Home Building Geography Index (HBGI) for the first quarter of 2023.
“This latest data indicates that the pace of single-family construction in the first quarter of 2023 has slowed from pandemic-induced highs, but a turning point is coming into view with a rebound led particularly in more affordable, lower-density areas,” said NAHB Chairman Alicia Huey, a custom home builder and developer from Birmingham, Ala. “And while many builders are having difficulties with labor shortages and tighter finance conditions, the multifamily building market remains strong with risks of slowing later this year.”
The 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 urban and rural geographies.
“Higher interest rates and construction costs, along with shortages of key materials such as transformers and concrete, have contributed to all single-family markets posting a negative year-over-year building growth rate, but this is particularly true for the largest, densest metro areas,” said NAHB Chief Economist Robert Dietz.