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What Home Building Says About Buyer Preferences

You can tell a lot about home buyers by what – and where – home builders are building homes. Their business depends on giving buyers what they want. So the homes they're building are a good reflection of what's popular with today's buyers. For that reason, the National Association of Home Builders recently looked at the past two and a half years of home building activity. Their Home Building Geography Index offers insight into where buyers want to live. What it found was a shift away from large, metro areas toward lower-density markets in the outer suburbs. Robert Dietz, NAHB's chief economist, says there are several reasons for the shift. “This shift was first caused by the initial impact of Covid on housing demand, which favored lower density neighborhoods,” Dietz says. “The shift continued in recent months due to housing affordability conditions that are causing both prospective renters and buyers to expand their geographic search for housing, aided by hybrid work patterns that allow for a combination of remote and office work.” Whatever the reason, the data is clear. The index shows the market share for single-family home building in large metros and inner suburbs fell about 3 percent over the past two years, while building in the outer suburbs was up almost 2 percent.

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