Custom home building posted a small gain year-over-year, according to the NAHB’s analysis of Census Data from the Quarterly Starts and Completions by Purpose and Design survey.
NAHB Chief Economist Robert Dietz writes:
There were 54,000 total custom starts for the third quarter of 2018. This was a slight improvement over the third quarter of 2017 (51,000). Over the last four quarters, ending with the third quarter of 2018, custom housing starts totaled 175,000. This was a 1.2% gain over the prior four quarters. Note that this definition of custom home building does not include homes intended for sale, so the analysis uses a narrow definition of the sector.
As measured on a one-year moving average, the market share of custom home building in terms of total single-family starts is now 20%, down from a cycle high of 31.5% set during the second quarter of 2009.
The onset of the housing crisis and the Great Recession interrupted a 15-year long trend away from homes built on the eventual owner’s land. As housing production slowed in 2006 and 2007, the market share of this not-for-sale new housing increased as the number of single-family starts declined. The share increased because the credit crunch made it more difficult for builders to obtain AD&C credit, thus producing relatively greater production declines of for-sale single-family housing.Read More