Every year since 2008, the National Association of Home Builders (NAHB) has conducted an annual census that collects company and demographic data from its members. It subsequently publishes these results on HousingEconomics.com.
This article updates previous studies with results from the 2015 annual census on the characteristics of NAHB’s builder members. Builder members are defined as those whose primary business is single-family home building, multifamily building, residential or commercial remodeling, commercial building, land development, or manufacturing of modular/panelized/log homes. Associate members are involved in a wide range of supportive industries and professions including, among others, trade contractors, manufacturers, retailers/distributors, designers, and architects. Findings from the 2014 Builder Census and Associate Census can be found on NAHB’s website. At the end of 2015, 39,217 builder members represented 32 percent of the total NAHB membership. Associate members make up the remaining 68 percent and will be highlighted in a future article.
More Than 60 Percent of Builder Members Build Single-Family Homes
Sixty-four percent of NAHB’s builder members are primarily single-family builders (spec/tract, custom, or general contracting), 19 percent are residential remodelers, 6 percent commercial builders, 5 percent multifamily builders, and another 4 percent land developers. One percent each are commercial remodelers and manufacturers of modular/panelized/log homes (Exhibit 1).
The composition of NAHB’s builder membership changed slightly between 2014 and 2015. The share of builder members primarily involved in single-family home building, for example, rose from 62 percent to 64 percent during this period, while the share who are residential remodelers fell from 22 percent to 19 percent. The latter marks the fourth consecutive decline in the share of residential remodelers, which stood at a high of 28 percent in 2011.
45% of Builders Have Between 1 and 4 Employees
In 2015, builder members had a median[1] of 5 employees on payroll. Twelve percent had 1 employee, 33 percent 2 to 4 employees, 25 percent had 5 to 9, 23 percent had 10 to 49, and 4 percent had 50 or more paid employees. Three percent had no payroll at all (Exhibit 2). The median number of employees had remained unchanged at 4 from 2008 to 2014.
The median number of employees on payroll varies significantly by the company’s primary activity. Manufacturers of modular/panelized/log homes, for example, had the largest payrolls, with a median of 12 employees in 2015, followed by multifamily builders, with a median of 11 employees, and commercial builders with a median of 10 employees. In contrast, among single-family builders, residential remodelers, and land developers, the median number of employees was 4.
Most Builders Started Between 1 and 10 Units
Six percent of builder members did not start any units in 2015, while 61 percent started between 1 and 10 units, 16 percent started 11 to 25 units, 11 percent 26 to 99 units, and 7 percent 100 or more units (Exhibit 3).
The median number of units started in 2015 was 5, unchanged from the 5 started in 2014 and 2013, but higher than the 4 units started in 2012 and the 3 started in 2011 (Exhibit 4).
As expected, the median number of starts varies significantly across different groups of builder members. Single- family builders, for example, started a median of 6 units in 2015, while multifamily builders started a median of 38.
Median Dollar Volume Continued to Climb in 2015
The median dollar volume of builder members in 2015 was $2,512,938, which is 14 percent higher than the median dollar volume in 2014 ($2,195,605). The 2015 median is the highest it has been since the membership census was launched in 2008. Seventeen percent of builder members each reported a 2015 dollar volume of less than $500,000 and between $500,000 and $999,999, 40 percent between $1.0 million and $4.9 million, 12 percent between $5.0 million and $9.9 million, 5 percent between $10.0 million and $14.9 million, and 8 percent reported their dollar volume in 2015 at $15.0 million or more. One percent of builder members reported no business activity in 2015 (Exhibit 5 & 6).
Levels of revenue also vary widely across categories of builder members. Multifamily builders had the highest median revenue in 2015 ($4.6 million), followed by commercial builders ($3.8 million), manufacturers of modular/panelized log homes ($3.5 million), land developers ($3.4 million), single-family builders ($2.9 million), commercial remodelers ($0.9 million), and residential remodelers ($0.8 million).
Age
The median age of NAHB builder members in 2015 was 56 years. Fifty-five percent of builder members are 55 years of age or older. Of the remaining, 26 percent are 45 to 54 years of age and 19 percent are younger than 45 years of age (Exhibit 7).
Over Half of Builder Members Have a Degree
The share of NAHB builder members with a college or advanced degree has remained above 50 percent every year since 2008. In 2015, 2 percent reported that they did not finish high school, 15 percent completed high school, 7 percent have career technical training, and 25 percent have had some college education. The remaining 52 percent have a college or graduate degree (Exhibit 8).
The share of builder members with a degree (either undergraduate or graduate) differs across builder categories. For example, seventy-four percent of land developers have a degree, compared to only twenty-nine percent of commercial remodelers.
Almost Two-Thirds Have Been Members for a Decade or More
The median NAHB membership tenure among builders is 15 years, with 67 percent of builder members having more than a decade of membership. Thirteen percent have been members 5 to 9 years, and 20 percent have been members for 4 years or less (Exhibit 9).
A profile for each category of builder member is available in the “Additional Resources” box at the top of this article.