U.S. housing construction continued to move in different directions across markets in Q2 2026, with single-family development contracting across most geographic categories while multifamily construction expanded in nearly every market.
According to the latest Home Building Geography Index (HBGI), single-family construction declined in six of seven geographic categories. However, the pace of contraction eased in most markets compared with the first quarter, suggesting that the slowdown may be moderating.
Single-Family Construction Shifts Toward Smaller Markets
Large metropolitan core counties experienced the sharpest decline, with single-family construction falling 13.9% for the fifth consecutive quarter. Meanwhile, outlying counties in small metropolitan areas were the only category to return to growth, increasing 0.9%.
The geographic mix of single-family construction is also changing. Large metro core counties accounted for just 14.6% of single-family construction, down 1.3 percentage points from a year earlier. In contrast, small metro outlying counties increased their share to 10.9%.
Small metro core counties remained the largest single-family construction market, representing 29.4% of activity, followed by large metro suburban counties at 24.0%.
Multifamily Growth Remains Concentrated in Major Metros
Multifamily construction presented a stronger picture, expanding in six of seven geographic categories.
Large metro core counties led the market with an 11.6% increase, followed by large metro suburban counties at 7.9%. Large metro outlying counties were the exception, declining 15.9%.
The growth has further concentrated multifamily development in major metropolitan areas. Large metro core counties now represent 35.4% of multifamily construction, while large metro suburban counties account for 27.3%.
Together, these markets make up 62.7% of total multifamily construction, reinforcing the continued importance of major metros for multifamily development.
What It Means for SFR and Multifamily
The latest HBGI data highlights a widening geographic divide in U.S. housing development. Single-family construction is increasingly shifting toward smaller and less densely populated markets, while multifamily activity continues to concentrate in major metro cores and suburbs.
For SFR, BTR, and multifamily investors and developers, understanding these geographic shifts will be increasingly important as housing demand, affordability, and development opportunities vary significantly across markets.
The Bottom Line
Q2 2026 data points to a continued reshaping of the U.S. housing construction landscape: single-family development is moving outward, while multifamily construction is concentrating in major metropolitan markets. These trends could have important implications for where developers deploy capital and where future rental housing supply is created.
Source: NAHB Eye on Housing
