An analysis of census data by NAHB economists shows that custom home building grew 4% in the second quarter of 2025 as high interest rates and home prices suppress demand for traditional spec home production.

There were 54,000 total custom building starts during the second quarter of 2025. Over the last four quarters, custom housing starts totaled 184,000 homes, up 2% from the previous period.

The current market share of custom-built homes is approximately 19% of total single-family starts, the highest since 2022, but still far short of the 31.5% set during the second quarter of 2009 when production home building cratered following the housing market collapse.

As NAHB Chief Economist Dr. Robert Dietz notes in this Eye on Housing post, the custom home building market is less sensitive to the mortgage interest rate cycle than other forms of home building, but is more sensitive to changes in household wealth and stock prices. With spec home building down and the stock market up, custom building is gaining market share.