Conditions for Custom Home Builders Little Changed in Latest US Census Bureau Survey

According to the US Census Bureau’s latest Quarterly Starts and Completions by Purpose and Design survey, with additional analysis provided by the National Association of Home Builders (NAHB), conditions for custom home builders remains relatively flat after a period slight softening of market share due to declining mortgage rates. However, NAHB believes that post-election stock market gains should support custom building at the end of 2024 and going into 2025.

There were 48,000 total custom building starts during Q3, a 4% decline compared to 2023Q3. Over the last four quarters, custom housing starts totaled 178,000 homes, just below a 1% decline compared to the prior four quarter total of 179,000.

NAHB also points out that after share declines due to a rise in spec building in the wake of the pandemic, the market share for custom homes increased until 2023 and then entered a period of retrenchment. As measured on a one-year moving average, the market share of custom home building, in terms of total single-family starts, has fallen back to 17.0%. This is down from a prior-cycle peak of 31.5% set during 2009Q2 and a 21% local peak rate at the beginning of 2023.