flexiblefullpage - default
Currently Reading

The Average Profit Margin of Single-Family Builders

billboard - default

The Average Profit Margin of Single-Family Builders

Though not fully recovered to pre-recession numbers, the gross profit margins and net profit margins of the average single-family builder have shown steady improvement

March 22, 2016
Single-family home built by U.S. home building company

NAHB recently conducted a survey of single-family builders, asking them to provide their income statements and balance sheets in an effort to gain a better overall understanding of the average profit margin of single-family builders and how the industry is looking overall.

Builders responding to the survey reported an average of $16.2 million in revenue for fiscal year 2014, according to the Eye On Housing blog. Of that $16.2 million, $13.2 million was spent on things such as land costs and direct and indirect construction costs, leaving an 18.9 percent, or $3.1 million, gross profit margin. Additionally, operating expenses such as finance, marketing, and owner’s compensation, ate another $2 million, leaving $1 million (6.4 percent) as the average net profit.

This 18.9 percent gross profit margin is at a level not seen since 2006, when the gross profit margin for single-family builders was 20.8 percent. Since falling in 2008 the gross profit margin has been rising steadily. The net profit margin of 6.4 percent for 2014 was also the highest since 2006 saw a 7.7 percent margin. In 2008 the net profit margin dropped to -3.0 percent and has been steadily rising ever since.

According to balance sheets for fiscal year 2014, builders had total assets worth an average of $9.2 million, with $6.2 million backed up by liabilities and $3.0 million held as equity. The average total assets for 2014 were slightly higher than the $8.9 million of 2012 and significantly higher than the $6.2 million posted in 2010.

Equity accounted for 26 percent of builders’ assets in 2006, and in 2014 that number jumped to 33 percent.

For a full breakdown of the survey, click the link below.

Read more

Related Stories

Business Management

Advice for Home Builders Navigating a Market in Flux

Successful builders can grow during this housing recession if they plan for it by maintaining liquidity, keeping up their reputation, and actively searching for opportunities

Housing Giants

Submit Your Company Info for the 2023 Housing Giants

Fill out the 2023 Housing Giants survey form to see if your company makes the cut in Pro Builder's list of the largest home building companies in the nation

New-Home Sales

Winning Strategies for Selling New-Construction Homes

Recent market conditions have taught home builders some valuable sales lessons and have also forced builders to take a hard look at how they're engaging homebuyers in order to meet rising expectations

boombox1 -
native1 - default
halfpage2 -

More in Category

native2 - default
halfpage1 -

Create an account

By creating an account, you agree to Pro Builder's terms of service and privacy policy.

Daily Feed Newsletter

Get Pro Builder in your inbox

Each day, Pro Builder's editors assemble the latest breaking industry news, hottest trends, and most relevant research, delivered to your inbox.

Save the stories you care about

Lorem ipsum dolor sit amet lorem ipsum dolor sit amet lorem ipsum dolor sit amet.

The bookmark icon allows you to save any story to your account to read it later
Tap it once to save, and tap it again to unsave

It looks like you’re using an ad-blocker!

Pro Builder is an advertisting supported site and we noticed you have ad-blocking enabled in your browser. There are two ways you can keep reading:

Disable your ad-blocker
Disable now
Subscribe to Pro Builder
Already a member? Sign in
Become a Member

Subscribe to Pro Builder for unlimited access

Lorem ipsum dolor sit amet, consectetur adipisicing elit, sed do eiusmod tempor incididunt ut labore et dolore magna aliqua.