Custom Home Building Annual Share Increases
According to data from the Census Bureau’s Survey of Construction (SOC), the custom home share increased to 20.2 percent of all single-family homes started in 2019. 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 homes built for sale, on the builder’s land, with the intention of selling the house and land in one transaction.
While the percent share of custom homes increased from 19.5 percent in 2018 to 20.2 percent in 2019, the percent share of built for sale decreased from 80.5 percent in 2018 to 75.4 in 2019. In 2019, the Census Bureau began flagging homes built for rent as a separate category, rather than including them in homes built for sale. The share of homes built for rent in 2019 was 4.4 percent.
The annual increase in the custom home building is consistent with the slight increase the quarterly published statistics have shown. Although the quarterly statistics are more timely, they lack the geographic detail available in the annual data set.
When analyzed by the 9 census divisions, the annual data show that the highest custom home share in 2019 was 41.4 percent in the New England Division. In the South Atlantic Division, on the other hand, the share was only 13.2 percent.
In the East South-Central Division, 39.9 percent of new homes started were contractor-built or owner-built houses, followed by East North-Central Division at 39.5 percent, and the Middle Atlantic Division at 35.5 percent. In the West North Central Division 24.8 percent of new homes started where custom homes. Less than 20 percent of the custom-built homes were started in West South-Central Division (18.5 percent), Pacific Division (16.5 percent) and Mountain Division (13.8 percent).—ASHOK CHALUVADI