Metrostudy has been chronicling the rise of big builders as they increasingly take share nationwide, but the real impact is being felt in local markets. Leveraging data on new-home closings across all U.S. metropolitan statistical areas (MSAs), we’ve identified that in the largest markets, the leading builders are gaining share. Moreover, the vast majority of major markets now are controlled by 10 or fewer production builders.
In 2012, new-home closings in the 100 largest MSAs accounted for 70 percent of all new homes closed nationally. Across all 100 markets, 10 builders were responsible for an average of 71 percent of those closings. The top 10 builders are not the same in each of the markets, but the Local Leaders data compiled by Metrostudy documents that a large number of national builders occupy the top 10 spots in many markets. (See the leading builders in the largest 50 MSAs online at go.hw.net/bol-local-leaders-2012.)
That local top 10 concentration has grown significantly since the prior home building peak. In 2005, the average share of top 10 builders in the 100 largest markets was 54 percent. Across these markets, only nine experienced a decline in concentration since 2005; on the flip side, two dozen of the top 100 had concentration grow by 25 percent or more. As concentration has grown, maintaining or growing market share has become a more critical element of home building success.