According to NAHB’s study of Census Data from the Quarterly Starts and Completions by Purpose and Design survey, custom home builders are growing year after year, despite the overall slowdown in single-family home construction.
The custom construction market is less subject to interest rate fluctuations than other types of home development, but it is more sensitive to changes in household wealth and stock prices.
With spec home development declining and the stock market rising, custom home building is gaining market share.
In total, 51,000 custom construction projects began in the third quarter of 2025.
This was a 6% increase from the third quarter of 2024. Custom housing starts totaled 187,000 residences over the last four quarters, up 5% over the previous four quarter total of 178,000.
According to a one-year moving average, custom home building now accounts for more than 19% of all single-family starts.
This is down from a previous cycle peak of 31.5% in the second quarter of 2009 and a recent top rate of 21% at the beginning of 2023, following which spec house building gained some market share.
Note that this definition of custom home building excludes residences meant for sale, hence the study in this post is based on a restrictive definition of the sector.
It refers to contract home construction in which the builder does not own a tax basis in the structure while it is being built.
[Read more about this topic on Eyeonhousing.org, via Robert Dietz]