A surprising hot spot is emerging for new construction: rural America.
Once overlooked by major builders in favor of suburban or urban markets, rural counties and small towns are now seeing a massive surge in new home development. From expansive master-planned communities to build-to-rent neighborhoods, rural regions are increasingly at the center of new home construction.
So, what’s fueling this boom? A mix of affordability, lifestyle shifts, and builder-friendly conditions are putting rural communities on the map. Here’s a look at 7 things you need to know about the new construction boom in the quietest parts of the country.
1. Home construction is alive and thriving in rural areas
While large cities and bustling suburban communities reported a dip in single-family home construction for the first half of the year, rural markets are bucking the trend.
So-called “microcounties” – towns or cities with 10,000 to 50,000 people – saw a rise in home building, “marking the fifth straight quarter of construction growth in these counties,” the National Association of Home Builders noted.
The demand is strong: These microcounties now hold 50.2% of single-family market share in the second quarter of 2025.
2. Mortgage applications are surging in rural America
Parallel to the construction boom in rural America is a rise in mortgage applications in these areas. While mortgage demands cooled off across the country in the face of higher interest rates, applications for home loans in rural and non-metropolitan areas have risen 80 percent since 2020, according to Fannie Mae research.
3. It all started with the COVID pandemic . . .
The “rural revival” or the “urban exodus” – call it whatever you’d like, but researchers noted city dwellers flocking to rural America as the COVID-19 pandemic waned on, searching for more open spaces and fewer people around them. Additionally, being cooped up at home sparked a desire for more spacious homes, gardens, and yards. With schools and businesses allowing for remote classes or working, people found they did not have to be tethered to city centers.
4. . . . and stuck around with remote and hybrid work
One of the biggest – and lasting – catalysts for the migration to rural America has been the rise of remote and hybrid work.
Forty percent of the U.S. is already working in a hybrid model and 88 percent of employees say flexible working is essential to a fulfilling professional life.
Freed from the daily commute, many buyers are widening their search into suburbia and beyond, prioritizing areas that offer more space, natural scenery, and a slower pace of life.
Mortgage applications from people living in urban neighborhoods looking to buy in rural communities are still seeing a sustained increase of nearly 20 percent above their pre-pandemic trend, or roughly 22,000 additional purchase mortgage applications per year.
5. Affordability and value
Rural communities also provide larger homes and bigger lots for a fraction of the price compared to crowded housing markets. This is a major draw for homebuyers who no longer need to be tied to city centers and have a tighter budget to work with.
For instance, a low-priced home in the city center of Houston, TX, might be in the $390,000-$400,000 range; a low-priced home in Houston suburb Waller might be in the $275,000 range.
So far, land values are accelerating faster in rural areas, too: researchers say home prices rose by more than 30% in nearly two-thirds of counties between March 2020 and March 2023 – including an increase of at least 40% in a quarter of counties.
On the flipside, urban areas saw home price growth of just 18%.
6. Land availability and a policy push
Another key reason: land availability. You know how dense city centers and suburban communities are getting, driving up property costs in the process.
Homebuilders are widening their scope to rural and small counties for the simple benefit of access to open space at scale. The sky’s the limit – building entire new developments, townhouses, single-family homes, multi-family homes and more. As early as 2021, home construction permits were up over 90% year-over-year in rural counties.
States and municipalities are also encouraging rural development through tax incentives and infrastructure investments – with zoning changes that make it easier to build at scale.
7. Changing lifestyle values
Beyond cost and logistics, lifestyle is playing a major role in the rural resurgence.
Simply put, many buyers are drawn to the appeal of small-town living. Think: less traffic, tighter-knit communities, and proximity to nature.
And with new build homes, homebuyers are pairing the best of both worlds, securing modern amenities, customized design and energy efficient features alongside spacious backyards, community parks, and the calmer pace of life that rural areas offer.
