The housing market of 2021 was one of the most challenging and rewarding on record. Housing demand was frenzied at times as historically low interest rates, pandemic-induced lifestyle changes, and strong demographics drove increased interest in homeownership. The heightened demand was met with supply chain headaches and a general lack of housing supply, which drove rapid home price appreciation.
As prices surged nationwide, reaching over 30% year over year in some relocation and second-home hot spots, builders were trying to keep up, but there were limitations to the number of homes that could be built quickly. As a result, most builders began capping sales to allow production to catch up, but there were simply not enough homes to go around.
Supply issues mounted throughout the year, as delays of all kinds persisted. Builders battled labor shortages, government service delays, a general lack of lots, and inconsistent deliveries of building materials. Home building timelines grew out of whack, while the cost to build a home increased. The Producer Price Index for construction materials averaged a near 27% increase in 2021 compared with 2020.
Even still, shoppers, desperate to secure a home, lined up for the opportunity to buy. Zonda’s New Home Pending Sales Index ended 2021 at a level of 158.4, down slightly year over year but up 36% from the same month in a strong 2019. The sales pace for builders that had homes to sell remained particularly strong even as volume declined, up 33% in the second half of 2021 compared with the second half of 2019, per Zonda data.
Overall, the Builder 100/Next 100 firms accounted for 493,039 new homes in 2021, a 12% increase compared with 2020. Similarly, the $205.5 billion in associated revenue was a 24% rise over 2020.
Here’s a look at the top 100 and Next 100 firms ranked by 2020 closings; click here for a downloadable PDF. For more information on the rankings, email [email protected].
Nik Scoolis, manager of housing economics at Zonda, contributed to this article.