Multifamily market untouched by construction slowdown – NAHB

“The single-family construction slowdown is not just limited to regions of the country that experienced the fastest production growth over the past year,” said NAHB chairman Jerry Konter. “Home building activity has slowed in nearly all regions, and large and small metro markets as high mortgage rates, elevated inflation and stubbornly high construction costs act as a drag on consumer demand and housing affordability.”

The findings, according to NAHB chief economist Robert Dietz, showed that building activity continued to shift away from centralized markets toward more outer, smaller areas.

“While the bulk of single-family construction continues to occur in the South and lower density markets where job conditions are more favorable, and housing costs are lower, the data clearly show these areas are acting as a leading indicator for the entire housing market,” Dietz said. “They are registering the largest production declines, even as other regions—including large metro core and suburban counties—are also displaying weakness as the national housing market has fallen into a recession due to rising mortgage rates and a slowing economy.”

On the other hand, multifamily construction growth in large metro suburban counties increased to 27.5% from 18% the previous year. Large metro core counties saw a 7.1% jump in the third quarter, while larger metro outlying counties reported a 13.1% decline.