Dive Brief:

• The number of custom home starts in the last year (ending in the first quarter of 2017) rose 2%, to 168,000, the National Association of Home Builders reported. 
• Custom homes accounted for 21% of total single-family starts, on a one-year moving average, compared to a 31.5% cycle high in the second quarter of 2009.
• The gradual slowdown follows recession-era growth in the share of not-for-sale new housing (as single-family starts tumbled). Now that single-family construction is rebounding, custom homes are accounting for a smaller share of the overall market, according to the NAHB.

Dive Insight:

Custom home starts set a post-recession high in 2016, up 8% over the previous year to 169,000. For 2016 as a whole, on a one-year moving average, custom homes accounted for 21.5% of single-family starts.

The NAHB expects custom homes' share of the single-family market to fluctuate in the coming quarters as the overall housing market continues to rebound in a slow-yet-steady pattern. Housing starts fell in April due to a dip in the multifamily sector, but the single-family segment rose 0.4% — 8.9% ahead of a year ago.

Custom homes are not restricted to large square footages. Some custom clients find appeal in houses that are the right-size for their needs, particularly as smaller, practical footprints help save land, material, and labor costs.

For owners who choose to build custom homes, the most common features they include are recreational rooms, media rooms, gyms and libraries, according to a November Houzz report. In the study, builders were the most common professionals selected by homeowners to assist with a custom-built project, followed by architects and general contractors.