Big Builders Continue to Gain Market Share

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The top 20 builders produced 29% of all the homes constructed in the country in 2018, according to data from BUILDER magazine. That share is a notable gain from 2017, when the largest 20 builders were responsible for 26.8% of all completions. Historical data shows a rising trend in the market share of the top 20 builders [*].  In 2000, these businesses built 16.6% of homes completed. By 2005, the share was 22.1%. The impact of the Great Recession drove the share down to 21% by 2008, but it bounced back in the following years, surpassing 25% for the first time in 2013. Large builders have grown by both entering new markets and expanding their operations in existing markets. An important component of this growth strategy has been the acquisitions of smaller firms and their land. The recent purchase of American West by Pulte is an example of this phenomenon. Large builders have also been able to leverage their size to access credit markets to acquire land and to achieve economies of scale in the purchase of building materials. Nonetheless, local and regional builders continue to be responsible for the majority of the homes constructed in the nation. [*]  The exact composition of the top 20 builders has varied over the years, so this analysis is based on the 20 builders with the largest number of closings in any given year and not on a fixed set of builders.

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