Homebuilding shifts towards less population-dense housing markets

The first quarter of 2020 witnessed a shift in home building towards less population-dense housing markets in the United States, a trend which was greatly hastened by the onset of COVID-19. While most states issued statewide stay-at-home orders with exemption for construction, some of the hardest-hit states had no exemptions for construction when the pandemic first hit. While NAHBā€™s Home Building Geography Index (HBGI) focuses on county-level homebuilding developments, it is also informative to look at the relationship between COVID-19-associated deaths per capita by state and single- and multifamily permit issuances per capita by state.

It is worth noting that while New York, New Jersey, and Connecticut had the highest COVID-19-associated fatality rates, the multifamily housing demand in these states was still robust as of the end of the first quarter. Among all of the statesā€™ population-adjusted, multifamily permit issuances for March, Connecticutā€™s permit number was at the 50thĀ percentile, i.e., represented the median of all statesā€™ population-adjusted multifamily permit issuances, while New York and New Jersey were above the 50thĀ percentile.

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