NAHB’s analysis of Census Data from the Quarterly Starts and Completions by Purpose and Design survey indicates custom home building continues to experience flat conditions amidst strong demand and rising material challenges.
There were 36,000 total custom building starts during the first quarter of the year. While this marks a 22% gain from the first quarter of 2020, that comparison is affected by March 2020 declines. Over the last four quarters, custom housing starts totaled 180,000, unchanged from the prior four-quarter total.
Given the relatively unchanged level of custom volume in a year with overall home building gains, the market share for custom home building declined. As measured on a one-year moving average, the market share of custom home building, in terms of total single-family starts, declined to below 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.