Custom Housing Starts Level in Q2

In the second quarter of 2018, housing starts for custom homes were relatively unchanged year-over-year, growing by 0.6 percent.

Looking at the last four quarters ending with 2018 Q2, there were 172,000 total custom housing starts. Using a one-year moving average, the share of custom homes in all single-family starts is 19 percent. The highest share was in 2009 with a 31.5 percent share, according to the National Association of Home Builders. The custom sector is expected to "experience ups and downs," in the near-term as single-family construction grows, concludes NAHB economist Robert Dietz.

The onset of the housing crisis and the Great Recession interrupted a 15-year long trend away from homes built on the eventual owner’s land. As housing production slowed in 2006 and 2007, the market share of this not-for-sale new housing increased as the number of single-family starts declined. The share increased because the credit crunch made it more difficult for builders to obtain AD&C credit, thus producing relatively greater production declines of for-sale single-family housing.

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