The gross revenue of the typical NAHB builder in 2021 increased $3.3 million, or 26.9%, from 2020, according to the association’s latest member census. The reported revenue was an all-time high and marked the first noticeable increase in median annual revenue since the metric began plateauing in 2017.
Although their median revenue has increased recently, most NAHB builders remain relatively small businesses by conventional standards. In 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% between $1.0 million and $4.9 million, 15% between $5.0 million and $9.9 million, 6% between $10.0 million and $14.9 million, and 13% reported dollar volume of $15.0 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.
The median number of housing starts was 6. Because the data on starts include a small percentage of very large builders, the average number of starts is much higher than the median, and for many purposes the median number of 6 housing starts is more representative of the typical builder.The median number of starts increased by an even 20.0 percent, from 5 in 2020 to 6 in 2021.
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. The increase was 53.9 percent—from 41.0 in 2020 to 63.1. The average number of single-family starts grew by 58.2 percent (from 26.3 to 41.6), while the average number of multifamily starts increased by 46.3 percent (from 14.7 to 21.5). Not surprisingly, multifamily builders tend to start more homes per year than single-family builders. NAHB’s multifamily builders reported a median of 84 housing starts in 2021, compared to 6 for single-family builders.
