Though home building has been directly impacted by mortgage rate fluctuations, changes in household income, and broad economic challenges over the past several years, the top 100 largest U.S. builders now account for roughly half of all new single-family home sales, according to Harvard’s Joint Center for Housing Studies. Just two national home building companies—D.R. Horton and Lennar—were responsible for nearly two-thirds of the total gain in market share among the top 100 builders from 2002 to 2020.
Both companies concentrated their home building efforts in the top 50 largest markets and expanded their overall production levels through strategic acquisitions, but even smaller regional builders can see significant growth in the coming years by focusing their operations in major metros.
However, even with the commanding presence of these top two builders in most of the markets they serve, regional builders have shown that they can compete effectively with national builders, particularly in mid-sized metros. Many of the scale benefits of homebuilding—buying power with local suppliers, coordination of subcontractors, and even some elements of the land assembly and entitlement process—play out principally at the local level.
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