Top Posts of 2015: It Takes 22 Subcontractors to Build the Average Home

With the end of 2015 approaching, NAHB’s Eye on Housing is reviewing the posts that attracted the most readers over the last year. In September, we used industry survey data to examine a perspective on industry organization.

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A previous post discussed how the current shortage of subcontractors in residential construction is becoming more acute.  This is significant, because subcontractors are very important to the construction of the typical home.  Periodically, NAHB has found it worthwhile to remind the public just how important.

NAHB addressed the topic most recently in the September 2015 Special Study in Housing Economics.  The study clearly shows that builders’ use of subcontractors remains as strong as ever.   For example, 70 percent of builders typically use somewhere between 11 and 30 subcontractors to build a single-family home.  On average, 22 different subcontractors are used to build a home.

Subs UsedData for the study came from a set of special questions added to the April 2015 survey for the NAHB/Wells Fargo Housing Market Index.

The questions covered how often builders subcontract 23 specific jobs.  In every case, the job was always subcontracted by at least two-thirds of the builders.  At the low end of the scale, “only” 68 percent of builders said they always subcontract finished carpentry.  At the other extreme, subcontracting is nearly ubiquitous for some jobs.  Over 90 percent of builders said they always subcontracted concrete flatwork, masonry, drywall, foundations fireplaces, technology, plumbing, electrical wiring, HVAC, carpeting and security systems.

Particular JobsEven when builders don’t always subcontract these jobs all they time, it’s common to subcontract them out at least part of the time.

About two-thirds of the builders in the survey reported subcontracting out 75 percent of the construction cost in the average single-family home they build.  The average share of construction costs subcontracted was 77 percent.

For more detail, including a history of NAHB subcontracting survey results going back to 1977 and a breakdown of subcontractor use by size of builder, please consult the full study.