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Who are NAHB’s Builder Members?

Special Studies, May 1, 2017
By Carmel Ford
Economics and Housing Policy
National Association of Home Builders
 
Report available to the public as a courtesy of HousingEconomics.com

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 here in HousingEconomics.com.

This article updates previous studies with results from the 2016 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 support industries and professions including, among others, trade contractors, manufacturers, retailers/distributors, designers, and architects. Findings from the 2015 Builder Census can be found here and Associate Census here. At the end of 2016, 38,935 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.

60% of Builder Members Build Single-Family Homes

Sixty percent of NAHB’s builder members are primarily single-family builders (spec/tract, custom, or general contracting), 23 percent are residential remodelers, 6 percent are commercial builders, 5 percent are multifamily builders, and 4 percent are land developers. One percent each are commercial remodelers and manufacturers of modular/panelized/log homes (Exhibit 1).

Exhibit 1. Share of Builder Members by Primary Business Activity 2016

The composition of NAHB’s builder membership changed slightly between 2015 and 2016. The share of builder members primarily involved in single-family home building, for example, decreased from 64 percent to 60 percent during this period, while the share who are residential remodelers increased from 19 percent to 23 percent.

45% of Builders Have Between 1 and 4 Employees

In 2016, builder members had a median[1] of 5 employees on payroll. Fourteen percent had 1 employee, 31 percent had 2 to 4 employees, 24 percent had 5 to 9, another 24 percent had 10 to 49, and 4 percent had 50 or more paid employees. Three percent had no employees on payroll (Exhibit 2). The median number of employees remained unchanged at 5 from 2015. From 2008 to 2014, the median number of employees on payroll was 4.

Exhibit 2. Total Number of Employees on Payroll 2016

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 23 employees in 2016, followed by commercial builders (12 employees), multifamily builders (11 employees), and commercial remodelers (5 employees). In contrast, among single-family builders, residential remodelers, and land developers, the median number of employees was 4.

60% of Builders Started Between 1 and 10 Units

Six percent of builder members did not start any units in 2016, while 60 percent started between 1 and 10 units, 14 percent started 11 to 25 units, 12 percent 26 to 99 units, and 8 percent 100 or more units (Exhibit 3). The median number of units started in 2016 was 6.

Exhibit 3. Total Number of Housing Starts 2016

The first year the member Census was conducted, 2008, builders reported starting a median of 4 units. The median then slipped to 3 units between 2009 and 2011, but gradually increased thereafter. It rose to 4 units in 2012, to 5 units between 2013 and 2015, and to 6 units in 2016 (Exhibit 4).

Exhibit 4. Median Number of Housing Starts - History

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 2016, while multifamily builders started a median of 42.

Median Dollar Volume Dips Slightly in 2016

The median dollar volume of builder members in 2016 was $2.4 million, barely under the median dollar volume reported in 2015 ($2.5 million). Nineteen percent of builder members reported a 2016 dollar volume of less than $500,000, 17 percent between $500,000 and $999,999, 39 percent between $1.0 million and $4.9 million, 11 percent between $5.0 million and $9.9 million, 5 percent between $10.0 million and $14.9 million, and 9 percent reported their dollar volume in 2016 at $15.0 million or more. One percent of builder members reported no business activity in 2016 (Exhibit 5 & 6).

Exhibit 5. Annual Revenue 2016

Exhibit 6. Annual Revenue - History

Levels of revenue also vary widely across categories of builder members. Multifamily builders had the highest median revenue in 2016 ($5.3 million), followed by manufacturers of modular/panelized log homes ($5.0 million), commercial builders ($4.0 million), land developers ($3.2 million), single-family builders ($3.0 million), commercial remodelers ($1.2 million), and residential remodelers ($0.8 million).

Age, Race and Ethnicity

The median age of NAHB builder members in 2016 was 56 years. Fifty-five percent of builder members are 55 or older. Of the remaining, 26 percent are 45 to 54 years of age and 20 percent are younger than 45 (Exhibit 7).

Exhibit 7. Age 2016

The vast majority (96 percent) of NAHB’s builder members are White (alone). One percent or less identify themselves as Black/African-American, American Indian/Alaska Native, Asian, or Pacific Islander. In terms of ethnicity, only three percent report being of Hispanic/Latino/Spanish origin (Exhibits 8 and 9).

Exhibit 8. Race

Exhibit 9. Ethnicity

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 2016, 2 percent reported that they did not finish high school, 14 percent completed high school, 7 percent have career technical training, and 24 percent have had some college education. The remaining 53 percent have a college or graduate degree (Exhibit 10).

Exhibit 10. Education 2016

The share of builder members with a higher education degree (either undergraduate or graduate) differs across builder categories. For example, seventy-seven percent of multifamily builders have a degree, compared to forty-one percent of commercial remodelers.

More Than Two-Thirds Have Been Members for a Decade or More

The median NAHB membership tenure among builders is 15 years, with 68 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 11).

Exhibit 11. Tenure as NAHB Member 2016

A profile for each category of builder member is available in the “Additional Resources” box at the top of this article.

[1]This article will use median values, as averages can be inflated by a few high production builders. Medians are largely unaffected by these outliers because it calculates the middle most value, not taking into account how high the highest values are. An increase in a median’s value indicates an overall shift of all the builders, not a change in a few large builders.

For more information about this item, please contact Carmel Ford at 800-368-5242 x8503 or via email at cford@nahb.org.


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