WASHINGTON – RealEstateRama – Nearly two-thirds of multifamily construction in the fourth quarter of 2019 occurred in “blue counties” where Hillary Clinton garnered the most votes in the 2016 election while nearly the same percentage of single-family home building took place in “red counties” where President Trump won. And momentum for continued single-family and multifamily construction continues in the red counties, according to the latest quarterly National Association of Home Builders (NAHB) Home Building Geography Index (HBGI).
The fourth quarter release of the HBGI examines all the counties in the U.S. based on the 2016 presidential candidate vote totals and sheds new light on red/blue county home building conditions.
Using fourth quarter permit data, NAHB’s HBGI finds:
- 51% of the U.S. population live in blue counties and 49% live in red counties;
- 61% of single-family construction occurs in red counties;
- 64% of multifamily construction is found in blue counties;
- Over the course of 2019, single-family construction expanded at a 1.7% average rate in red counties, while declining 1.2% in blue counties; and
- Multifamily construction posted much faster growth rates in red counties vs. blue (21% vs. 8% gain).
“The lack of housing supply and inventory is the primary challenge facing housing markets nationwide, and are key factors why the nation is struggling with a housing affordability crisis,” said NAHB Chairman Dean Mon, a home builder and developer from Shrewsbury, N.J. “This latest HBGI data reveals that red counties are outpacing their peers in blue counties, despite almost two-thirds of apartment construction occurring in blue areas. The analysis highlights the importance of land use rules and development costs in determining the amount of home construction that takes place in communities across the U.S.”
“While single-family permits ended the year just slightly positive and multifamily permits registered solid growth, ongoing challenges remain with respect to adding supply in high-growth, high-cost markets,” said NAHB Chief Economist Robert Dietz. “The lagging performance of single-family construction in blue counties, combined with the 2019 declines for home building in large metro suburban areas, highlight this affordability challenge, which is a source of frustration for younger households in high-cost markets.”
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 regions.
Other findings in the fourth quarter HBGI:
- Single-family construction continues to lag in manufacturing areas, posting a 1.6% decline over the course of 2019, compared to a slight gain for the rest of the nation.
- Single-family construction is growing the fastest in small metro, outlying areas (small metro suburbs), while it continues to decline in traditional suburbs of large metro areas (1.4% decline)—the worst performing region for single-family.
- Multifamily construction posted gains in all regions by the end of the year.