Custom Home Building Contracts

NAHB’s analysis of Census Data from the Quarterly Starts and Completions by Purpose and Design survey indicates custom home building gained market share during recent quarters but experienced a notable drop for construction starts at the beginning of 2023.

There were 36,000 total custom building starts during the first quarter of the year. This marks a 22% decline compared to the first quarter of 2022, matching weakness experienced throughout the home building sector. Over the last four quarters, custom housing starts totaled a solid 204,000 homes, a flat reading compared to the prior four quarter total (205,000).

After market share declines due to a rise in spec building in the wake of the pandemic, the market share for custom homes has increased. As measured on a one-year moving average, the market share of custom home building, in terms of total single-family starts, has increased to 21%. However, this is down from a prior cycle peak 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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2 thoughts on “Custom Home Building Contracts

  1. You made a good point that it’s important to also consider the design features to go for first when planning to get custom home construction services. I’d like to find a good service like that because I’m interested in looking for a lot that I could buy soon. That way, I will be able to finally get my dream home built.

  2. When it comes to custom home building contracts, it’s crucial to ensure that all aspects are covered, right down to the roofing materials suppliers. This level of detail not only fosters transparency but also helps in making informed decisions and maintaining the quality of the project. Every component matters!

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