Custom Home Building Share Improves in 2022

According to data from the Census Bureau’s Survey of Construction (SOC), custom homes share increased to 20.4 percent of all single-family homes started in 2022 from the 17.6 percent recorded in 2021. The custom home market consists of contractor-built and owner-built houses—homes built one at a time for owner occupancy on the owner’s land, with either the owner or a builder acting as a general contractor. The alternatives are homes built for sale (on the builder’s land, often in subdivisions, with the intention of selling the house and land in one transaction) and homes built for rent.

In 2022, 71.4 percent of the single-family homes started were built for sale, and 5.9 percent were built for rent. While the custom-home percentage increased in 2022, the number of custom homes started in 2022 (207,472) was actually higher than the number of custom homes started in 2021 (199,675).

The quarterly published statistics show that the custom-home share of single-family starts declined. Although the quarterly statistics are more timely, they lack the geographic detail available in the annual data set.

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.–BY ASHOK CHALUVADI