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NAHB: Share of custom homes built declines slightly

The National Association of Home Builders reports on its Eye on Housing blog, citing data from the Census Bureau’s Survey of Construction (SOC), that custom homes accounted for 17.6% of new single-family homes started—down slightly from the 17.8% recorded in 2021 and the lowest the annual custom home share has been since the 2005 re-design of the SOC.

The custom home market consists of contractor-built and owner-built houses—homes built one at a time for owner occupancy on the owner’s land, with either the owner or a builder acting as a general contractor. The alternatives are homes built for sale (on the builder’s land, often in subdivisions, with the intention of selling the house and land in one transaction) and homes built for rent. In 2021, 77% of the single-family homes started were built for sale, and 5.4% were built for rent.

Although the custom-home percentage declined slightly in 2021, more single-family homes were started; so, the number of custom homes started in 2021 (199,683) was actually higher than the number of custom homes started in 2020 (176,499).

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For more information, see NAHB’s Eye on Housing blog.

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