Washington, D.C.—In a sign of ongoing affordability challenges and a tepid housing market, single-family construction fell across all geographic regions in the second half of 2025. The exception was low-density, low-populated micro counties. Multifamily construction posted gains across all geographic regions.
These are the major findings of the latest Home Building Geography Index from the National Association of Home Builders for the final two quarters of 2025. The report was delayed due to last fall’s government shutdown and includes data for the third and fourth quarters.
“The HBGI data highlight how affordability and space needs are driving home construction toward lower-density markets,” said Bill Owens, a home builder and remodeler from Worthington, Ohio. “Large metro core counties saw the steepest single-family decline while smaller and micropolitan areas with lower land and construction costs gained momentum.
The HBGI is a quarterly measurement of building conditions across the country. It uses county-level information about single-family and multifamily permits to gauge housing construction growth in various urban and rural geographies.
“While single-family home building continues to face challenges across most of the nation, multifamily construction strengthened across every region in the fourth quarter following two years of uneven performance,” said Robert Dietz. “Growth returning to large metro core counties coupled with sustained construction in smaller markets signals a more balanced and geographically diverse multifamily sector heading into 2026 than in years prior.”
Single-family trends by geography
The index registered declines for different-sized single-family markets in the fourth quarter. The exception was micro counties, which posted a 1.6% gain. This marked the seventh straight quarter of construction growth in these counties.
Large metro core counties reported a 12.8% decline in the final quarter of last year. This was the largest year-over-year four-quarter moving average decline since 2023.
The HBGI geographic trends mirror the national trend in 2025, as single-family permits were down 7.4% from 2024.
The geographic composition of single-family construction continued to evolve in 2025. Large metro core counties lost 1.0 percentage point of market share between the fourth quarter of 2024 and the final quarter of 2025. Small metro core counties remained the largest market, adding 0.3 percentage points in market share. Micro counties posted the largest gain, up 0.6 percentage points from 2024.
The fourth-quarter HBGI shows the following market shares in single-family home building:
15.1% in large metro core counties
24.2% in large metro suburban counties
9.3% in large metro outlying counties
29.4% in small metro core counties
10.5% in small metro outlying areas
6.9% in micro counties
4.5% in non-metro or micro counties
Multifamily construction up across the board
Multifamily construction posted gains across all geographies in the fourth quarter. This marked the first time all geographic sectors showed quarterly growth since 2023.
Micro counties recorded the highest growth in the fourth quarter, up 14.0% on a year-over-year four-quarter moving average. Large metro outlying counties posted the lowest growth at 1.9%.
Market share of multifamily construction shifted in the fourth quarter of 2025. Higher levels of multifamily construction in smaller, less densely populated areas remained. Small metro core counties saw the largest increase, gaining 0.6 percentage points. Large metro outlying counties posted the largest decline, losing 0.5 percentage points. Other geographies saw little change.
The fourth-quarter HBGI shows the following market shares in multifamily home building:
35.1% in large metro core counties
26.4% in large metro suburban counties
3.7% in large metro outlying counties
25.1% in small metro core counties
4.9% in small metro outlying areas
3.5% in micro counties
1.2% in non-metro or micro counties
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