Single-family home construction fell across nearly all regions of the U.S. in the second half of 2025. But low-density, lightly populated microcounties stood out as the sole exception to the downward trend, according to new data released Monday by the National Association of Home Builders (NAHB). 

NAHB’s latest Home Building Geography Index (HBGI), which details county-level permit data for the third and fourth quarters of 2025, paints a picture of a housing market shaped by ongoing affordability constraints.

High land and construction costs have pushed single-family development out of large metropolitan cores and into microcounties, which NAHB defines as “low‑density, low‑population counties that form micropolitan areas, typically centered around small towns with 10,000-50,000 residents.”

“The HBGI data highlight how affordability and space needs are driving home construction toward lower-density markets,” NAHB Chairman Bill Owens stated in a press release. He emphasized that while large core counties saw steep declines, smaller micropolitan areas benefiting from lower land and construction costs gained momentum.

At the same time, the multifamily sector experienced a significant rebound, posting quarterly gains across every geographic region in the fourth quarter for the first time since 2023, according to the NAHB release.

The publication of the third- and fourth-quarter HGBI data was delayed until late March due to a federal government shutdown that occurred last fall, NAHB noted. Despite the delay, the figures provide a clear picture of a shifting landscape as builders adapt to evolving buyer needs and economic pressures.

For the single-family sector, the national trend was decidedly negative, with total single-family permits down 7.4% in 2025 compared to 2024. Large metro areas with the highest population densities suffered the steepest drop, reporting a 12.8% decline in the closing quarter of the year.

According to NAHB’s report, “this was the largest year-over-year four quarter moving average since 2023.” Over the course of 2025, these large metro cores lost 1% of their single-family market share, while microcounties grew by 1.6% in single-family construction. This marks the seventh consecutive quarter of growth for these areas.

In sharp contrast to the single-family market, multifamily construction strengthened across the board. NAHB reported that microcounties led the multifamily surge as well, boasting a 14% year-over-year increase on a four-quarter moving average. Even the slowest-growing regions for multifamily — counties sitting on the outer perimeter of large metro areas — managed a 1.9% gain in the fourth quarter. 

NAHB Chief Economist Robert Dietz noted in the release that this widespread strengthening follows two years of uneven performance, signaling a “more balanced and geographically diverse multifamily sector heading into 2026.”