In the United States, the homebuilding industry brings together some of the largest publicly-traded residential construction companies. These firms all work from a similar operational model, based on purchasing land, then performing construction activities to improve the land.
Homebuilding industry professionals are involved in the construction of single-family homes, prefabricated homes, and mobile homes. Much of the industry tends to centralize operations through specialized contractors. In the U.S., improvement fixtures, such as window frames or plumbing supplies, are excluded from the revenue figures reported by the industry.
Important Homebuilding Industry Statistics
#1. For the 5-year period ending in 2018, the homebuilding industry in the U.S. is expected to achieve one of its highest levels of growth in its history. It has experienced an annualized growth rate over this period of 4.8%. (IBIS World)
#2. More than 346,000 businesses are currently involved in the homebuilding industry in the United States. These firms employ over 620,000 people and generate revenues which top more than $87 billion each year. (IBIS World)
#3. The types of exterior on new homes has shifted over the years, though vinyl siding continues to be the most popular option. About 27% of industry revenues are generated by homes with an exterior clad with a vinyl exterior. (IBIS World)
#4. Remodeling activities are also up for the homebuilding industry. In 2018, activities on existing homes may achieve 8% growth thanks to housing inventories that are historically low. (Fine Homebuilding)
#5. In 2006, right before the recession hit the global economy, more than 2 million total permits were issued. In 2014, multi-family housing returned to pre-recession levels of 440,000 new building permits for the first time. (Huffington Post)
#6. Single-unit housing accounts for about 2 out of every 3 permits that are issued in the United States to the homebuilding industry. In total, just over 1 million permits were issued to the industry. (Huffington Post)
#7. Texas is the top state for new construction for the homebuilding industry, accounting for over 166,000 permits. Florida follows as the second-largest market, with over 84,000 permits issued. California ranks third, with over 83,000 permits issued. (Huffington Post)
#8. In 2017, the greatest number of homebuilding starts in the U.S. were located in the Western states, with a growth of 14.8% over the year before. Every region saw increases, though the Northeast had the lowest gains, with a 5.7% increase in homebuilding starts. (Eye on Housing)
#9. The median price of a home sold in the United States in March 2018 was $250,400. There were 1.3 million housing starts listed for the month, with a seasonally adjusted 618,000 new home sales. (National Association of Realtors)
#10. Investments into residential properties in the United States contribute up to 5% of the GDP in any given year, which includes figures from the homebuilding industry. (LinkedIn)
#11. Since 2008, median home prices have risen in the United States by more than 11%. At the same time, the demand index for housing has risen from 83.1 to 127. (Redfin)
#12. The average home buyer will look for about 10 weeks to find a home they want. They’ll also look at up to 10 properties, including new construction, before settling on the home they wish to purchase. (Smart With Your Money)
#13. Between March 2012 and March 2017, the amount of time it takes for a home that is on the Multiple Listing System (MLS) to sell has been reduced by 57 days. (Mortgage Reports)
#14. The construction of new homes in 2016 was 5% higher than the number of new homes built in 2015. More than 1.1 million new homes were constructed in both years. (Fortune)
#15. 98% of properties offered for sale in the homebuilding market are able to get their listed asking price, if not more. (Mashvisor)
#16. For the first time, Millennials (33%) are representing the largest generation demographic in the U.S. real estate market. Baby Boomers still represent 30% of buyers interested in new homes and properties. (National Association of Realtors)
#17. 80% of residential growth for the homebuilding industry is expected to be in suburban areas by the year 2025. In comparison, just 5% of new home construction is expected to occur in rural areas in the United States. (Market Watch)
#18. In 2017, 52% of buyers interested in homes offered by the homebuilding industry were classified as first-time buyers. (National Association of Realtors)
#19. 44% of buyers looking for new construction properties found and bought the home they wanted by using internet listings. Zillow receives almost 500 million page views per month, while Trulia receives about 300 million page views per month. (Bruce Clay)
#20. New homes that use aerial images, walkthroughs, and drone footage as part of the listing sell up to 68% faster when compared to listings that do not use these options. (Record Bee)
#21. Only 11% of the companies in the homebuilding industry are operating an active blog. 3 out of 4 companies don’t even have one. (National Association of Realtors)
Homebuilding Industry Trends and Analysis
The homebuilding industry came to the verge of collapse in 2007-2009. As the economy began to recover and housing prices began to rise, more opportunities began to develop. Although multi-family units have recovered in recent years, the total number of permits issued is still down by 50% compared to 2006 figures.
If there is such a high demand for new housing, then why aren’t more permits being issued? Restrictions and regulations on new mortgages or mortgage refinancing has excluded some potential buyers from the market. The availability of zero-down mortgages has become heavily restricted.
There is also a shortage in the number of skilled laborers within the homebuilding industry right now. These shortages are preventing construction companies from being able to meet the entire demand for new homes that is currently available at the local level. Shortages exist in framing, roofing, drywall installation, and cabinetmaking.
The homebuilding also faces some demographics challenges within the United States as it looks to grow. With the exception of Asian-American homebuyers, minority groups are under-represented in new construction purchasing. 78% of all new homes are purchased by individuals who identify themselves as being Caucasian or white.
Job growth in the homebuilding sector is outpacing many other industries. If these shortages can be filled with skilled laborers, expect this industry to take off.