Residential Real Estate Construction Industry Profile

The US residential real estate construction industry includes about 170,000 establishments (single-location companies and branches of multi-location companies) with combined annual revenue of about $260 billion. Major companies include DR Horton, Pulte Homes, Lennar, NVR, and KB Home. The industry is fragmented.

Builders of both single-family and multifamily housing are included in the industry, as are residential remodelers. The industry includes general contractors, who build on land owned by others, and operative builders, who build on land they own or control.

COMPETITIVE LANDSCAPE

Demand for new housing depends on population growth and is linked to low interest rates. Large builders have some advantages in purchasing and marketing, but building methods are essentially the same for large or small builders. While larger builders have efficiencies because they can repeatedly build the same home models, they generally develop projects on large pieces of land. Small builders, therefore, build most homes in dense urban markets where little land is available. The industry is capital intensive: average annual revenue per employee is about $400,000.

PRODUCTS, OPERATIONS & TECHNOLOGY

Major products are single family homes and multifamily buildings. Of the homes built in recent years, 70 percent are single family and 30 percent are units in large apartment-style buildings. Multifamily units can be either apartments or condos. Home remodeling accounts for about 15 percent of industry revenue. Companies generally specialize in either single family or multifamily work.

The building process consists of distinct steps: ...