Custom home building posted a year-over-year gain during the first quarter of 2022, according to an NAHB analysis of Census Data from the Quarterly Starts and Completions by Purpose and Design survey. The 46,000 custom building starts during the quarter is a 28% increase compared with the first quarter of 2021.
Over the last four quarters, custom housing starts totaled 205,000 units, a 13.9% gain from the prior four-quarter total.
After some market share declines due to a rise in spec building post-COVID, the market share for custom homes is increasing. As measured on a one-year moving average, the market share of custom home building, in terms of total single-family starts, increased to 18%. This is nonetheless down from a cycle 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. It represents home construction undertaken on a contract basis for which the builder does not hold tax basis in the structure during construction.
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