Custom home building share drops


The National Association of Home Builders is reporting that though more custom homes were built in 2017 than the previous year, the share of custom homes overall has decreased. According to data from the Census Bureau’s Survey of Construction (SOC), the custom home share declined to 20% of all single family homes started in 2017—lowest since mid-2000. Contractor-built or owner-built houses—that together make up the custom home market—are built one at a time for owner occupancy on owner’s land with either the owner or a builder acting as the general contractor. The alternative is spec homes built on builder’s land with the intention of selling the house and land in one transaction. While the percent share of custom homes declined from 21% in 2016 to 20% in 2017, the number of custom homes built increased from 161,900 units in 2016 to 171,900 in 2017.

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When analyzed by the nine census divisions, the highest custom home share was in the New England and East North Central Divisions where 40% of new homes started were custom built. In the South Atlantic and Mountain Divisions, on the other hand, the share was only 14%. In the Mid-Atlantic Division, 33% of new homes started were contractor-built or owner-built houses, followed by the East South Central Division at 31%, and the Pacific Division at 16%. In the West North Central and West South Central Divisions, 22% and 18% of new homes started where custom homes, respectively.

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