Half of homebuilders have disappeared

One reason that new home construction isn’t keeping up with the demand to provide more inventory is the devastation that has taken place in the home building sector.  About half the nation’s home builders disappeared during the housing depression and those that are left are the lowest number of builders since 1997.

According to Census Bureau’s Economic Census, the number of establishments whose primary activity is new residential construction fell from 98,067 in 2007 to 48,557 in 2012, a dramatic 50 percent decline.  The latest tally is the lowest number of builders reported by the Economic Census since 1997, the first time builders were reported separately from remodelers.

The National Association of Home Builders shows builder membership (single-family and multifamily) falling from 57,095 in 2007 to 26,421 in 2012–a 54% drop.  The similar contractions experienced by the overall industry (50%) and NAHB (54%) during this five-year period demonstrate that NAHB’s loss of builder members was a mere reflection of the overall disappearance of new residential builders from the American economy