Custom home building has been a relative bright point, despite the fact that overall single-family construction has decreased by 5% in the first four months of 2026.
The custom building market is less susceptible to fluctuations in interest rates than other types of home construction; however, it is more susceptible to fluctuations in household wealth and stock prices.
Custom building has increased its market share as a result of the stock market’s rise and the decline in spec home construction.
The first quarter of 2026 saw a total of 36,000 custom building starts, as per NAHB’s analysis of Census data from the Quarterly Starts and Completions by Purpose and Design survey.
This represents a 3% increase from the first quarter of 2025.
Over the past four quarters, the number of custom single-family housing starts has reached 188,000, a 3% increase from the previous four quarters’ total of 182,000 residences.
The market share of custom home building is currently 20% of the total single-family starts, as determined by a one-year moving average.
This represents a decrease from the 31.5% cycle peak achieved in the second quarter of 2009 and the 21% recent peak rate at the beginning of 2023, following which spec home building acquired a portion of the market.
It is important to note that the definition of custom home construction in this post does not encompass homes that are intended for sale.
Consequently, the analysis in this post employs a restricted definition of the sector.
It denotes the undertaking of home construction on a contract basis, during which the constructor does not possess a tax basis in the structure.
Almost exclusively, smaller, private home contractors engage in this type of construction.
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