Big Geographical Differences in Home Building Times

The time to build a single-family home, from pulling the permit to hauling away the construction debris, increased slightly in 2018 compared to the prior year and varies significantly depending on where the home is being built and who is doing the work.

National Association of Home Builders (NAHB) analyst Na Zhao used data from the Census Bureau's 2018 Survey of Construction (SOC) for a post in NAHB's Eye on Housing Blog.  It says that the average completion time for a single-family home is 7.7 months. Actual building takes 6.7 months with an additional month elapsing between getting authorization and starting construction. The average time (from Mortgage News Daily files, not the blog post) in 2017 was 7.5 months.  All of the additional time in 2018 occurred during construction.

Homes built for sale or rent take the shortest time to build, a total of 7.0 months, while those built by the landowner acting as general contractor consumed slightly more than a year and also had the longest permit to start lag time. Custom homes built by a contractor occupied the middle ground at 9.4 months. The timelines in all three cases have expanded slightly compared to those in 2017.

There are significant differences geographically. The longest building time was in the Middle Atlantic at 10.5 months and in New England at 9.9 months. Those, along with the East South Central, Pacific, and East North Central all had times exceeding the national average. The shortest construction period, 6.6 months, takes place in the South Atlantic division. The average waiting period from permit to construction start varies from the shortest time of 18 days in the Mountain division to the longest one of 40 days in the Pacific division.

Houses in metropolitan areas, on average, took nearly 7.5 months from permit to completion, 1.3 months less time than those in non-metropolitan areas. This pattern was quite consistent across the nation, except for New England and the Middle Atlantic where the reverse was the case.

The Census survey also collects sale information for houses built for sale, including the sale date when buyers sign the sale contracts or make a deposit. Looking at single-family homes completed in 2018, 27.7 percent were sold before construction started, 32.3 percent were sold during construction, 11.4 percent during the last month of construction.  Seventeen percent were sold after completion.  Of homes finished in 2018, 11.7 percent remained unsold as of the first quarter of this year.