Dive Brief:
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Custom homebuilding expanded in almost all U.S. regions last year, according to a National Association of Home Builders’ analysis of the most recent Survey of Construction by the U.S. Census Bureau.
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One-quarter of homes built in 2014 were custom, more than in 2012 and 2013, but fewer than in 2008 to 2011 — when production builders had limited access to acquisition, development and construction loans, which shifted more business in the direction of custom builders, the report said.
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New England and the East North Central states had the highest shares of single-family custom home starts last year, while Mountain, Pacific and South Atlantic states had the lowest, the survey said. The Mountain states were the only ones where custom homebuilding did not increase in 2014.
Dive Insight:
The Census Bureau considers a home custom-built if it is constructed on an owner’s land with either the owner or a builder acting as the general contractor, and it does not include homes intended for sale. That arrangement was not as popular before the housing crisis and the recession as it is now. When mainstream builders are busy, custom home builders tend to be less in demand.
The future performance of the custom home sector is anybody’s guess. “The market share for custom homebuilding will likely experience ups and downs in the quarters ahead as the overall single-family construction market expands,” NAHB economist Robert Dietz wrote in a May analysis of the first-quarter numbers.
