It’s important for manufacturers, distributors, retailers, and other stakeholders in the building products industry to understand the changes in operability of the industry year over year. That’s why it’s important to have a solid understanding of how many home builders there are in the U.S. This is a common question among stakeholders in the building products industry and one that requires a deeper level of analysis to get a reliable answer for.
The reality is that even the U.S. Census Data is not detailed enough on this topic because it only tracks home builders that own the land being developed, and does not differentiate construction professionals that identify as a ‘General Contractor’ who do various types of work and/or remodeling from those General Contractors’ who build homes.
Over the decades of serving this industry, our market researchers have taken time to better understand the reality of how many builders are in the U.S. Utilizing the data from the top 200 home builders, the Bureau of Labor Statistics, membership data from the National Association of Home Builders (NAHB), along with our industry data we can estimate that there are approximately the number of home builders in the U.S. which informs market sizing research we provide to the industry.
Because the accuracy of our recommendations to clients will often hinge on a solid understanding of this figure, this question is one that we often revisit to see what improvements we need to make with our modeling that informs the custom market research we provide to the biggest names in the building products and home improvement industry.
Taylor Pence, the Client Growth Manager at The Farnsworth Group feels that, “It is easy for us at The Farnsworth Group to take these conversations for granted, as this is just a normal conversation for us to have since our research focus is only on the building materials industry—however, I think this type of conversation and internal analysis we take for the industry is actually pretty unique and ultimately provide our clients with better data to make decisions with….so we wanted to share what we think through for topics like these.”
Considerations For Accurately Figuring Size of Market Data
Correct data sources, multiple sources, and accurate interpretation is key to ensuring an accurate sizing picture of the building materials industry is being painted. It is vital to know when to consider the size of the employee count vs the firm count, or when to pull additional sources to further tease out particular trade groups, i.e., home builders from general contractors. These types of exercises ensure that a more accurate view of the industry is being utilized for research like market potential or product market sizing.
Take for another example this related question that seems like it would be straightforward…What is the number of homes built annually in the U.S.?
Even with the large amount of industry consolidation over the past few years, the U.S. home building market is still heavily reliant on smaller home builders with close to half of homes being built by smaller firms.
According to Builder Magazine’s Top 200 home builders, on average the top 200 US home builders closed 2,492 homes in 2023. After adjusting out the top home builders (D.R. Horton: 90,777 closes; Lennar: 73,087; Pulte: 28,603; NVR: 20,662) the average number of home builds fall to 1,455.
Again, using the data from the top 200 home builders, the Bureau of Labor Statistics , membership data from the National Association of Home Builders (NAHB), along with our industry data we know that a majority of home builders in the US are averaging a much lower annual figure. This lower number accounts for those custom home builders who are building two or three homes a year all the way up to those builders taking on semi-custom and tract home developments.
By distilling these data sources, we can better understand the true size of the home builder population and provide a more accurate picture of home building activity so you can trust the results of your research.
Whether you are working to understand product usage through incidence rates, or you need to understand which trade group to invest further with based on population size and spend, having an accurate view of the size of your target audience will allow to you make a better decision driving by data.
Who do we research?
When you're trying to get in front of building product customers, finding answers to even the simplest questions can sometimes feel downright impossible. Fortunately, our team has four decades of experience recruiting hard to reach building product customers, like tradespeople and suppliers, to conduct custom market research. Our market researchers also excel when studying specific segments of homeowners based on various attributes.
Getting To Accurate Insights That Drive The Right Decisions
At The Farnsworth Group, we’ve helped hundreds of building products manufacturers, retailers, and industry associations go from a place of uncertainty about what to do next to a place of clarity in just a matter of months.
We’re in your corner to reduce your risk of launching the wrong marketing campaign or a product line that won’t perform. We’re here to help you understand how your brand is perceived and where there is white space in the market for your company to get their foot in.
You get much more than data. Our proven approach blends market intelligence consulting with primary market research to deliver actionable insights and grounded recommendations impacting your marketing & sales teams, brand teams, channel teams, and product teams. You get customized research built around your needs with proprietary results that off-the-shelf approaches could never produce.
Because our team works exclusively in the building, home improvement, and lawn & ranch industries, as we have for nearly 4 decades, you can trust that our insights and recommendations take into account the complex variables that impact your end to end go to market situation in the complex building materials environment.
