III. Industry Analysis
Last year, according to IBISworld.com, U.S.single family home building generate revenues of $210 billion and employed 600,000 people. There were 166,000 businesses in this market, for an average of $1.2 million per business. The average wage of a worker in this industry was approximately $50,000, which includes everyone from management to specialized contractors, to general crew. The National Association of House Builders reports 906,000 housing starts last year, which included 622,000 one-unit housing starts.
As the American housing/real estate industry and its health is considered a driver for the American economy as a whole, key statistics such as new home sales, homes on the market, and average home prices are tracked constantly by news and reporting agencies.
Major revenue streams of the industry include: Single-family house construction on one’s own land for resale, single-family house construction for others (contracting and design), remodeling (including alterations and additions), non-housing construction, and multi-family housing construction.
Home construction is a relatively standardized practice. Firms providing this service are judged based on the quality of their process and their ability to work to a schedule. Steps common to the construction of most new homes include the following:
- Grading and site preparation
- Foundation construction
- Installation of windows and doors
- Rough electrical
- Rough plumbing
- Rough HVAC
- Finish electrical
- Bathroom and kitchen counters and cabinets
- Finish plumbing
- Carpet and flooring
- Finish HVAC
- Hookup to water main, or well drilling
- Hookup to sewer or installation of a septic system
- Punch list
Many of these steps, such as framing, roofing, plumbing, electrical, etc. are generally undertaken by subcontractors specializing in those areas.
The five largest companies in the American residential home construction industry include D.R.Horton, Inc, Pulte Homes, Inc., Lennar Corporation, Centex Corporation, and KB Home. The largest players attempt to compete nationally, but most other players compete only regionally or locally