Single-family construction growth registered modest gains in small metro areas and declines in large metro counties, while apartment growth is shifting to counties with lower population densities, according to the latest National Association of Home Builders (NAHB) Home Building Geography Index (HGBI) for the first quarter of 2025.

“Single-family housing construction moderated to start the year as economic expectations remain uncertain,” said NAHB Chairman Buddy Hughes, a home builder and developer from Lexington, North Carolina. “Meanwhile, multifamily output remained lackluster in high-density areas but registered strong growth in areas surrounding smaller metro centers.”

“Elevated interest rates, tight lending standards and economic uncertainty remain persistent factors limiting construction growth,” said NAHB Chief Economist Robert Dietz. “And despite overall market declines for the multifamily sector, as demand for affordable, attainable housing continues to be strong, the multifamily market is exhibiting strength in lower-cost areas where housing supply can more readily expand.”

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.

The index registered mixed conditions for different-sized single-family markets in the first quarter, but overall single-family construction will likely follow the same path as 2024, with little to no growth expected. However, the possibility of lower interest rates in the second half of this year could spur increased single-family construction activity in the latter part of 2025.

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

• 16.1% in large metro core counties
• 24.6% in large metro suburban counties
• 9.4% in large metro outlying counties
• 29.2% in small metro core counties
• 10.0% in small metro outlying areas
• 6.5% in micro counties
• 4.2% in non-metro/micro counties

Multifamily construction exhibited a trend of solid growth in counties with lower population densities during the first quarter while the market share in large metro core counties continued a long-term downward trend. It was 45.1% in 2016 and in less than 10 years has fallen 9.4 percentage points to a 35.5% share, the lowest level since the HBGI inception. Indeed, the market share for core counties of large metro areas fell three percentage points in the last quarter alone, and this quarterly decline led to a rise for all other urban and rural geographic areas in the opening quarter of this year.

The first quarter HBGI shows the following market shares in multifamily home building:

• 35.5% in large metro core counties
• 25.7% in large metro suburban counties
• 4.7% in large metro outlying counties
• 24.1% in small metro core counties
• 5.1% in small metro outlying areas
• 3.7% in micro counties
• 1.2% in non-metro/micro counties

The full HBGI data with geographic market shares and growth rates can be found at nahb.org/hbgi.