The business of the typical NAHB builder grew significantly between 2020 and 2021, according to results from NAHB's latest member census. The 2021 NAHB census shows that the median gross revenue of an NAHB builder in 2021 was an all-time high of $3.3 million, up 26.9% from the previous year.
NAHB reinstated its member census during the industry-wide downturn of 2008, when median annual revenue of builder members was only around $1 million. Median annual revenue began rising in 2013, plateauing at $2.6 million to $2.7 million from 2017 through 2020.
Although their median revenue has increased recently, most NAHB builders remain relatively small businesses by conventional standards. According to the 2021 NAHB census:
- 14% of NAHB's builder members reported a dollar volume of less than $500,000,
- 13% reported between $500,000 and $999,999,
- 38% reported between $1 million and $4.9 million,
- 15% reported between $5 million and $9.9 million,
- 6% reported between $10 million and $14.9 million, and
- 13% reported $15 million or more.
In comparison, the Small Business Administration's size standards classify most types of construction businesses as small if they have average annual receipts of less than $39.5 million.
Agreeing with the increase in builder revenue, there was a particularly strong surge in the average number of housing starts per builder between 2020 and 2021 from 41 in 2020 to 63.1. The average number of single-family starts grew by 58.2% (from 26.3 to 41.6), while the average number of multifamily starts increased by 46.3% (from 14.7 to 21.5).
This information was originally published in the August 2022 special study available on NAHB's Housing Economics webpage. Paul Emrath, NAHB vice president for survey and housing policy research, provides additional insights in this Eye on Housing post.
*Note: All articles have been redistributed from NAHBnow.com*