NW REporter

Home builders report impressive growth between 2020 and 2021

Home builders reported significant growth in activity between 2020 and 2021, according to the latest member census from the National Association of Home Builders.

The NAHB report showed the median gross revenue of a member builder in 2021 was $3.3 million, up an impressive 26.9% from the previous year, although inflation is believed to be a factor for part of the increase. In 2008, when the association reinstated its census during an industry-wide downturn, members reported median annual revenue of around $1 million. Revenue began rising in 2013 after being relatively flat between 2008 and 2012.

An analysis of revenue groupings shows most NAHB builders are relatively small businesses. About 27% of members reported less than $1 million of revenue. Only 13% reported dollar volumes exceeding $15 million. In between are members with revenue between $1 million and $4.9 million (38%), between $5 million and $9.9 million (15%), and between $10 million and $14.9 million (6%).

Asked about the number of homes started, the average number was 63.1 in 2021, while the median was six. Of the average, about 41.6 were single family units with the remaining 21.5 being multifamily homes. (NAHB noted the starts include data from a small percentage of very large builders, which skewed the average. The median number of six is considered to be more representative of the typical builder.)

The latest census revealed a particularly strong surge in the average number of housing starts per builder between 2020 and 2021 – up nearly 54% (rising from 41 in 2020 to 63.1).

NAHB’s multifamily builders reported a median of 84 housing stats in 2021, while single-family builders reported six starts.

At the time of the 2021 member census, NAHB had a total of 37,767 builder members. They account for slightly more than a third of the group’s total membership of 110,196. The remainder are classified as associate members who are engaged in activities related to home building.

NAHB also queried respondents on their primary activity. Roughly 62% reported single family building as their primary activity, with 21.6% saying residential remodeling was their main activity. The remainder were focused on multifamily building (5.2%), commercial building (4.9%) and land development (4.7%).

Builder members reported a median of five employees, a figure that includes both construction and non-construction jobs. NAHB noted members frequently rely on subcontractors, with many of them carrying relatively few employees on their payroll.

About 11% of members in the 2021 census were women. That was about the same percentage as in the construction industry overall, but it marked the highest female share since the inception of the NAHB census.

In addition to surveying members about business revenue, primary business activities, and housing starts, the census covered tenure as members and basic demographics for the various categories of members.