Single-family construction declined across all geographies in the first quarter of 2026, according to the latest Home Building Geography Index (HBGI), as elevated interest rates, rising material costs, and labor shortages slowed home building activities at the start of the year. Meanwhile, multifamily construction remained broadly resilient, posting growth in most markets.
Single-Family
The pullback in single-family activity was sharpest in large metro core counties, which recorded a 16.0% year-over-year decline on a four-quarter moving average (4QMA) basis — a deterioration of 3.2 percentage points from the prior quarter. More broadly, single-family construction in non-rural areas, which are counties within a metro area, fell 9.2%.
These declines are part of a longer-term structural shift away from dense population centers. Large metro core counties have shed an average of 0.1 percentage points of single-family market share every quarter for the past decade, with the pace accelerating after the pandemic. In Q1 2026, large metro cores accounted for just 14.7% of single-family permits — down 1.3 percentage points from a year earlier and 4.1 percentage points below their Q1 2016 share. Large metro suburban counties have similarly lost 3.3 percentage points of market share over the past decade.
The gains have flowed to smaller and outlying markets. Outlying counties in small metros recorded the largest increase, gaining almost two percentage points compared to a decade ago and 0.7 percentage points relative to Q1 2025 to capture 10.8% market share.
Multifamily
Multifamily construction told a different story in Q1 2026, expanding across most geographies. Large metro core counties led the way with 20.8% growth (4QMA), picking up pace after returning to positive territory in the prior quarter. Construction in non-rural counties grew 10.5% overall.
Markets with negative growth were large metro outlying counties, which fell 24.6%, and micro counties, which edged down 0.6%. Both had posted consistent growth throughout 2025 and appear to be normalizing. Rural counties, in general, saw multifamily growth slow sharply, from 11.4% in the previous quarter to just 1.8%.
On the market share front, large metro core had the largest multifamily share increase by 3.2 percentage points to 36.5%. Meanwhile, large metro outlying counties saw the largest decline, dropping 1.6 percentage points over the year to 3.1%.
Over a longer horizon, multifamily market share has migrated slowly but steadily from large metro core counties to smaller metro core counties, with the former losing 8.6 percentage points and the latter gaining 5.1 percentage points over the past decade. However, since last year, large metro core counties have steadily regained market share as demand for rental housing remains strong.
The first quarter of 2026 HBGI data along with an interactive HBGI map can be found at https://nahb.org/hbgi.
This article was originally published by a eyeonhousing.org . Read the Original article here. .
