US Custom Home Building Starts Drop 9.0% Year-Over-Year in Q2

A closer look at Wednesday’s US Census Bureau Quarterly Starts and Completions by Purpose and Design Survey, with analysis by the National Association of Home Builders (NAHB), shows that there were 49,000 custom home building starts in the US during Q2, down 9.0% from a year earlier.

Over the latest four quarters, custom single-family housing starts totaled 183,000 homes, effectively unchanged from 184,000 during the prior four-quarter period.

The market share of custom US home building, based on a one-year moving average, was 20.0% of total single-family starts. That compares with a prior-cycle peak of 31.5% in 2009Q2 and a recent peak of 21.0% at the beginning of 2023.

NAHB’s definition of custom home building excludes homes intended for sale and represents construction undertaken on a contract basis in which the builder does not hold tax basis in the structure during construction. NAHB noted that this form of home building is almost universally undertaken by smaller, private home builders.