Custom Home Building Fared Better Than Overall Market in Second Quarter

Custom home building performed better than the overall building market in the second quarter of 2020, according to NAHB. Single-family housing starts dropped off by 11% in the second quarter compared to last year while custom home building starts dropped only by 6%. Total starts hit 45,000 while 2019’s second quarter had 48,000. What constitutes a custom home build for this data are any homes with custom work not intended for sale. Though the numbers show a decline in building, custom housing for the last four quarters increased by 5% compared to the prior four year quarter total.

As measured on a one-year moving average, the market share of custom home building in terms of total single-family starts is now 20%, down from a cycle high of 31.5% set during the second quarter of 2009. However, due to the construction volume of the second quarter, the quarterly market share increased to 21%. It worth noting that the custom building share also increased in the wake of the Great Recession, and that custom builds are more likely to occur in low density markets.

Read More