Predicting which markets will prove most fertile for new-home builders over the next five years may involve as much crystal ball guesswork as economic modeling. nevertheless, the science of forecasting which markets stand the best chance for new-home growth has been steadily improving. one reason for this is the growing granularity of housing data, employment and migration figures, and other local market economic indicators. Another reason is the steadier trajectories of local market business cycles. as a result, longer-term forecasts are becoming more plausible, if not entirely reliable. here are our predictions for the 100 largest new-home construction markets over the next five years through 2008.

To map out our pedictions, BIG BUILDER worked with Philip Hopkins, the managing director of U.S. Regional Services for Global Insight, an economic forecasting company created from the merger of DRI and Wharton Econometrics Forecasting Associates ( Based in suburban Philadelphia, Hopkins and his team track 12 or more variables for more than 300 metropolitan markets in the U.S.

In addition to tracking individual layers of job, population, income, and other data, Hopkins looks for changes influencing the presence of “the creative class” in a given market. Coined by Carnegie Mellon researcher Richard Florida, the term refers to the upwardly mobile, highly educated residents who create vibrant cities and influence median incomes and housing prices in and around those markets.

Hopkins also studies the economic structural diversity of each market—the breadth and health of industries represented in a given market—and how dependent a market is on certain industries. Finally, in modeling future housing activity, Hopkins studies the recent patterns in home prices, permits, and housing turnover to determine how broader regional economic developments are playing out in individual markets. In a number of metro markets, for example, sky-high home prices are forcing otherwise strong housing demand—and future construction—into adjacent and sometimes distant markets.

What follows is a ranking of the 100 largest markets based on Global Insight projections for the total number of new homes expected to be built in the years 2004 through 2008. The table also includes the average growth rates for several core factors driving housing and economic growth in each of those markets.