News & Opinions
The latest news and insights from Hanley Wood’s outspoken experts and key thought-leaders throughout the residential and commercial design and construction industry.
Custom Home Construction Steady as Overall Market Expands
Robert Dietz / NAHB / December 21, 2012
The onset of the housing crisis and the Great Recession interrupted a 15-year long increasing trend toward a growing share for spec home building. As housing production slowed in 2006 and 2007, the share of non-spec building, particularly custom home building, increased. This not-for sale single-family housing construction is classified in Census housing starts data as either owner- or contractor-built.
The share increased because the credit crunch made it more difficult for builders to obtain AD&C credit and more difficult for buyers to obtain mortgage financing due to falling prices. Thus, the market share of custom home building rose because such construction does not require a sale of real estate from a builder to a homebuyer.