Friday, August 19, 2022
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Flat Conditions for Custom Home Building




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NAHB’s analysis of Census Data from the Quarterly Starts and Completions by Purpose and Design survey indicates custom home building registered relatively flat conditions for the second quarter of 2022. There were 53,000 total custom building starts during the second quarter of the year. This marks a 2% decline compared to the second quarter of 2021 in terms of year-over-year change.

Over the last four quarters, custom housing starts totaled 204,000 units, a 9% gain from the prior four-quarter total.

After market share declines due to a rise in spec building, post-covid the market share for custom homes has increased slightly. As measured on a one-year moving average, the market share of custom home building, in terms of total single-family starts, was flat at 18%. This is down from a cycle high of 31.5% set during the second quarter of 2009.

Note that this definition of custom home building does not include homes intended for sale, so the analysis in this post uses a narrow definition of the sector. It represents home construction undertaken on a contract basis for which the builder does not hold tax basis in the structure during construction.



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