NAHB’s analysis of Census Data from the Quarterly Starts and Completions by Purpose and Design survey indicates custom home building expanded by 10.8% in 2021 amid strong demand for move-up purchases given a rise in existing home equity.
There were 49,000 total custom building starts during the final quarter of 2021. This marks a 11.4% gain from the fourth quarter of 2020. Over the last four quarters, custom housing starts totaled 195,000 units, a 10.8% gain from 2020 (176,000).

The acceleration of custom home building has increased its market share after a period of decline. As measured on a one-year moving average, the market share of custom home building, in terms of total single-family starts, increased to 17.3%. This is down from a recent high of 31.5% set during the second quarter of 2009.
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. Custom homes are homes built on an owner’s lot with the builder providing a service of construction rather than a sale of real estate. The majority of custom construction is undertaken by private, community home builders. —BY ROBERT DIETZ