As tracked by the NAHB HBGI, the changing geographic shares of single-family construction across the U.S. reflect the evolution of home building.
As can be seen from the above figure, the market share of single-family permits for small city core areas declined slightly over the last eight years, starting initially from a little less than 30% of single-family home construction for the third quarter of 2011. After falling to a cycle low in 2014 the share returned to its approximate starting point. This pattern reflects the fact the post-Great Recession home construction recovery occurred later for small metro areas than other parts of the country.
In contrast, there has been steady market share expansion for the exurbs. With an initial market share of 6% in the third quarter of 2011, home building has expanded in these outlying areas of large metro to 9% by the end of the first quarter of 2019. Declining housing affordability conditions had provided a relative advantage to outlying areas with more affordable land.
The market shares for the remaining five regions as of the first quarter of 2019 are as follows: highly urbanized areas (core counties of large metro areas), 18%; inner and outer suburbs of larger metropolitan areas, 27%; outer suburbs of small metropolitan areas, 8%; small towns, 6%; and rural areas, 3%.