NAHB’s analysis of Census Data from the Quarterly Starts and Completions by Purpose and Design survey indicates custom home building lagged the overall single-family construction market in the third quarter of 2020.
There were 52,000 total custom building starts during the third quarter, a 7% decline compared to the third quarter of 2019. Over the last four quarters, custom housing starts totaled 175,000, which was a 2% increase over the prior four quarter total of 171,000 starts, thanks to strong quarterly totals at the end of 2019 and the start of 2020.
As measured on a one-year moving average, the market share of custom home building in terms of total single-family starts is now 19%, down from a cycle high of 31.5% set during the second quarter of 2009. Nonetheless, more custom builds are likely to occur in low-density markets as home demand shifts in the near-term.
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.