Custom Home Building Share Improves
Based on information from the Survey of Construction (SOC) by the Census Bureau, the proportion of custom homes among all single-family homes initiated in 2022 rose to 20.4%, up from the 17.6% recorded in 2021. The custom home market encompasses residences constructed by contractors or owners—individual homes built for owner occupancy on the owner’s land, where either the owner or a builder serves as the general contractor. In contrast, other options include homes built for sale (typically in subdivisions on the builder’s land, with the intention of selling both the house and land in a single transaction) and homes constructed for rental purposes.
According to LBM, when analyzed by the 9 census divisions, the annual data show that the highest custom home share in 2022 was 45.4 percent in New England Division. In the South Atlantic Division, on the other hand, the share was only 13.8 percent. In the East South-Central Division, 39.6 percent of new homes started were contractor-built or owner-built houses, followed by the East North-Central Division at 37.9 percent and 34.6 percent in the Middle Atlantic Division. In the West North Central Division 23.4 percent of new homes started where custom homes, followed by 15.6 percent in the West South-Central Division, 18.0 percent in the Pacific Division, and 15.5 percent in the Mountain Division.