15 Biggest Players in The US Home Building Industry

With the industry in flux over the last decade, we have put together a simple graphic to look at the biggest players in today’s homebuilding industry.

Yuka Kato
January 22, 2020
4 min read

The home building industry was hit hard by the 2007 recession. As funding all but dried up, residential construction took a sharp nosedive. In fact, only 50% of builders survived between 2007 and 2012, with 2012 recording the fewest number of residential builders since reporting started in 1997. Despite this decline, the home building industry in the US has been steadily growing  with a surge in growth over the last five years.

Top 15 Home Builders In the U.S.

With the industry in flux over the last decade, we have put together a simple graphic to help visualize who the biggest players are in today’s home building industry. In this graphic, we look at the top 15 home builders in the US and their share of the market. Each home builder is visually represented by the size of its market share as well as its market value.

Understanding the Industry

While the market has seen considerable growth since the recession, most of this growth has been seen only in the last five years, when the industry grew by 2.5%. In 2019, the US home building industry was estimated to see revenues of $89.4B.

The home building industry has a tremendous variance in the size of companies that hold market share. While a majority of the market is comprised of small builders and independent contractors, the top home builders have market values ranging from $66M to $15.5B. This large variance is the result of there being a few large players in the industry that are asymmetrical in size.

The Biggest Companies Rule the Market

When considering the home building industry and its market value, it is important to note that the top 15 home building companies account for over 73% of the total industry market value. This means the remaining 27% of the industry is comprised of smaller builders and independent contractors throughout the country. What’s more surprising, however, is that the top 5 companies-Lennar, D.R. Horton, NVR, Pulte Group, and Toll brothers-account for 60% of the total home building industry in the US, with Lennar and D.R. Horton each accounts for 17% of market share.

The market saturation by these larger players can make it difficult for smaller companies to make headway in the home building industry, yet not impossible. It simply means that there are higher barriers to entry given the size of the competition. Greater market share often means greater access to resources, which can help secure additional clients, allowing even more market share to be captured.

An Opportunity for Small Home Builders

Despite this, there is an opportunity for smaller home builders to make a space for themselves in the home building industry by focusing on specific niches. The large builders that hold most of the market share build a wide variety of homes from single-family homes attached and detached, multi-family homes, apartment buildings, condos, etc. This leaves an opportunity for smaller builders to specialize.

Smaller builders can present themselves as specialists in niche areas of home building. Focusing on a small segment of the home building industry can help small builders grow and capture a larger share of the market. As there have been growing concerns about affordable housing, energy efficiency, and trends towards minimalism, small builders have the opportunity to capitalize on these concerns and trends. For instance, smaller builders could choose to specialize in a niche such as urban infill, green home building, affordable homes, or architecturally appropriate homes for immigrant communities.  

Another interesting thing to note is that many of these top home builders are found in regions that have the highest number of total building permits (the Northeast, Midwest, South, and West). However, you can find some of these large builders in other regions as well, such as D.R. Horton, which operates in the Pacific as well.

With larger home builders concentrating operations in specific regions, they present opportunities for smaller builders to capture market share. Some regions such as the Northeast are extremely competitive due to dense population and few building opportunities. By looking to other markets where a high number of building permits are issued, small builders and independent contractors have the opportunity to make inroads. Choosing to operate in a specific niche can make small builders more competitive in these markets where many of the big players already operate, especially as the housing industry gains momentum.

The Future is Bright

2019 has been one of the most successful years for the home building industry since the recession. This upward trend is forecasted to continue as Fannie Mae and the National Association of Home Builders forecast continued growth for the industry. A growing industry presents opportunities for both the top companies in the industry as well as small builders, especially those that differentiate themselves through niche specialties.

However, there are still serious problems the industry is facing. There are issues with labor shortages as well as the issue of low growth rates in new construction. Furthermore, the industry could be impacted by any changes to housing-related tax measures and mortgage qualifications standards. The growth that has been seen and is forecasted to continue is a sigh of relief for the industry, but the industry is not out of the dark just yet. The important thing is for home builders to stay on top of trends and to watch for waning interest in housing and adjust operations accordingly to minimize the impact of any adverse changes in the market.

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