Homebuyers

Homebuilders Shift Focus to Suburbs and Beyond

Over the last 16 months, people's attitudes towards where they live have shifted dramatically, driven by the rise of remote work. For many, gone are the days of living in the bustling metropolis. Instead, they are drawn to more land and more homes for their money in the outlying areas. And that's exactly where homebuilders are building more homes.

According to a new report from the National Association of Home Builders, homebuilding is increasing in suburban areas and other areas outside of the city center.

The report showed that in terms of single-family home construction, the share of homes being built in "large metro core" counties decreased over the last year. Meanwhile, construction in exurbs and suburbs increased.

"With the shift to telework brought on by the COVID-19 pandemic, housing demand continued to show the strongest gains in lower density markets in the first quarter as people have flexibility to live further out and even outside some metro areas," said NAHB Chairman Chuck Fowke.

"Given the regulatory burdens and lack of lots in higher density, higher cost markets, builders are better able to meet demand in suburban, exurban, and rural areas because of the lower cost to build," Fowke added.

According to the report, construction is also on the rise in areas with shorter commutes, indicative of people's desire to decrease their time in the car should they have to go back into an office eventually.

"As workplaces increasingly adopt hybrid work models for roughly 30-40% of the American workforce, renters and buyers will have increased market power to minimize travel times and reduce both housing and transportation cost burdens," NAHB Chief Economist Robert Dietz said.