Jean Dimeo

Peter James Field/ Jean Dimeo Editor-in-Chief

Dan Ryan, CEO of Dan Ryan Homes in Frederick, Md., summed up 2012 for America’s home builders: “Last year was a good shot in the arm. We felt it everywhere.”

That’s what he told BUILDER senior editor John Caulfield recently—and our 2012 Builder 100 and Next 100 lists of the nation’s largest 200 builders confirm Ryan’s words. Most of the 200 firms on the combined lists experienced significant increases in closings (total: 184,445) and in revenue (total: $57.8 billion). The top 100 builders closed 167,658 homes, an 18.4 percent increase over 2011, or 44.24 percent of total new-home sales and multifamily for-sale completions. The 13 public builders scored some of the biggest gains in 2012—a 25.9 percent jump in home building revenue, to $26.6 billion.

Meanwhile, the Census Bureau reported that last year, nationwide single-family starts increased by 24 percent to 535,000 units, and multifamily starts jumped 37 percent to 245,000 units. New single-family home sales climbed nearly 20 percent to 368,000 units.

Reasons for Results  2012 wasn’t 2006, but it was a heck of a good year for builders. There are a number of reasons why last year’s results were so much rosier than in 2011:

• The recession was finally over.

• The unemployment rate sunk to about 8.2 percent from nearly 9 percent the previous year.

• Buyer demand re-emerged as the unemployment rate shrunk, mortgage rates dropped, and lenders lent more.

• Banks eased (some) lending restrictions for construction loans.

• Expansion into new markets and diversification allowed builders to build more houses.

• Mergers and acquisitions made a comeback as land and homes values appreciated.

• Builders scooped up lots in preparation for increased demand.

There are a couple of lingering economic issues that still challenge the nation’s builders: the U.S. unemployment rate isn’t expected to decline much in 2013 and neither will home foreclosures (1.8 million foreclosed in 2012; 1.5 million homes are in some state of foreclosure this year).

But let’s not spoil the party. The NAHB predicts that single-family starts will increase this year by 26 percent to 672,000 units, and by 28 percent to 858,000 units in 2014. Not the 1.15 million starts from 2006, but I’m sure most builders are smiling again for the first time in years.