Building Industry Still Primarily Led by Small-Scale Enterprises, According to NAHB Census Results

In the dynamic world of residential construction, the National Association of Home Builders (NAHB) plays a significant role. The latest NAHB member census reveals an interesting trend within the builder segment - a dominance of small businesses.

The largest segment of builder members reported revenue between $1 million and $4.9 million, indicating a focus on modest-scale operations. This trend is further reinforced by the median number of employees among these builders, which remained steady at six in 2024, just like the previous year.

Interestingly, nearly all NAHB builder members meet the small business definition set by the U.S. Small Business Administration, which defines residential builders and remodelers as small businesses if they generate under $45 million in average annual receipts, or $34 million for land developers.

The census data suggests that many builders rely heavily on subcontractors, allowing them to remain flexible while keeping direct payroll costs low. This strategy seems to be a common approach, with only 16% of builder members exceeding $15 million in total revenue in 2024.

Despite the growth, 60% of builder members reported earning under $5 million for the year. The median builder brought in $3.7 million in 2024, an 8% increase over 2023.

The census found a wide range of production levels within the builder segment. While the median number of housing starts by builder members remained constant at six since 2021, it's important to note that this figure represents a diverse spectrum of builders, from single-family and multifamily home builders to commercial builders, residential remodelers, land developers, and modular or panelized home manufacturers.

However, the NAHB residential construction industry is not without its challenges. Affordability issues, labor shortages, and material cost volatility continue to pose significant hurdles. The census findings, including category-specific profiles for seven distinct types of builders, are available in the August 2025 special study, providing a deeper dive into these challenges and potential solutions.

In conclusion, the NAHB member census underscores the small-business dominant structure within the builder segment. This information is crucial for policymakers, industry leaders, and aspiring builders alike, offering insights into the current state and future prospects of the residential construction industry.

Building Industry Still Primarily Led by Small-Scale Enterprises, According to NAHB Census Results