Custom Home Building Lags in Third Quarter 2020

NAHB’s analysis of Census Data from the Quarterly Starts and Completions by Purpose and Design survey indicates custom home building lagged the overall single-family construction market in the third quarter of 2020.

There were 52,000 total custom building starts during the third quarter, a 7% decline compared to the third quarter of 2019. Over the last four quarters, custom housing starts totaled 175,000, which was a 2% increase over the prior four quarter total of 171,000 starts, thanks to strong quarterly totals at the end of 2019 and the start of 2020.

As measured on a one-year moving average, the market share of custom home building in terms of total single-family starts is now 19%, down from a cycle high of 31.5% set during the second quarter of 2009. Nonetheless, more custom builds are likely to occur in low-density markets as home demand shifts in the near-term.

Note that this definition of custom home building does not include homes intended for sale, so the analysis in this post uses a narrow definition of the sector.—

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