North America Residential Construction Market Size
| Study Period | 2019 - 2029 |
| Base Year For Estimation | 2023 |
| Market Size (2024) | USD 0.85 Trillion |
| Market Size (2029) | USD 1.06 Trillion |
| CAGR (2024 - 2029) | 4.50 % |
| Market Concentration | Medium |
Major Players
*Disclaimer: Major Players sorted in no particular order |
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North America Residential Construction Market Analysis
The North America Residential Construction Market size is estimated at USD 0.85 trillion in 2024, and is expected to reach USD 1.06 trillion by 2029, growing at a CAGR of 4.5% during the forecast period (2024-2029).
- Prior to the epidemic, there was already pent-up demand. It was false to say that millennials preferred renting over owning homes. Simply put, millennials lack the resources to own real estate. Some were affected by the Great Recession upon starting their careers; therefore, they did not have the savings of previous generations. Mortgages became less accessible as a result since banks were subject to tougher regulations and had to agree to lower down payments of at least 15-20%. Millennials were finally given the opportunity to buy homes, which boosted the already competitive market. Lockdown forced people to save, government stimulus programs improved their purchasing power, and steeply rising asset values The expectation of more remote employment and different COVID-19 constraints also contributed to significant migrant movements, which further fueled the purchasing frenzy. Strong investment in United States residential will drive industry spending through 2022.
- Cheap home supplies and historically low borrowing rates have boosted residential investment. In 2021, growth intensified as a result of increased home construction activity brought on by pent-up demand and improved vaccination rates among the populace. The demand for housing has also been supported by improvements in the labor economy. Despite this, the Federal Reserve has been forced to hike interest rates in 2022 due to growing inflation and worries of a recession. The time is now to update long-standing housing and urban planning rules and rebalance the supply and demand imbalance. The price of delay might be a severe social catastrophe brought on by a big, intergenerational group of people's discontent with their living circumstances, which would disproportionately affect younger generations.
In November 2022, Canada's investments in building construction dropped 1.4% to USD 20.4 billion. Most of the drop (5.6%) came from Alberta. While the non-residential sector in Canada grew 0.2% to USD 5.5 billion, the residential sector fell 2.0% to USD 14.9 billion.
North America Residential Construction Market Trends
800,000 Housing Units Must Be Built Annually in Mexico to Keep Up with Demand
In order to meet demand, Mexico will need to invest approximately 4% of its GDP annually in constructing 800,000 housing units over the next 20 years, which equals 3.87% of the country's GDP. While the number of individuals living together is declining, there is a growing demand for homes in Mexico. In Mexico, there were five people living in each home in 1990, which reached 3.6 per home in 2020. In the upcoming years, a lot of homes in Mexico will also need to be renovated. According to Mexico's national statistics office, 57% of homes were constructed by the owners, and many do not adhere to building rules.
The real estate market in Los Cabos experienced its hottest year ever in 2021. With the number of single-family home sales increasing by 126% and the median price increasing by 49% year over year, it was a seller's market for the first time. Condo purchases increased by 192 percent, with a 19 percent increase in the median price number of single-family home sales increasing by 126% and the median price increasing by 49% year over year. It was a seller's market for the first time. Condo purchases increased by 192 percent, with a 19 percent increase in the median price. While growth accelerated outside the Los Cabos region, any backlog in pre-construction and pre-development inventory also rushed off the shelves. Demand for residential options increased significantly in Todos Santos, a hip surf town, as well as in La Paz, the capital of Baja Sur.
Canadian Home Buyers Have Been Rapidly Rising Canadian Mortgage Rates
Mortgage rates in Canada have been growing quickly as the country's inflation rate, which as of October 2021 was 6.9%, remained high. Inflation has been declining recently, partly as a result of the Bank of Canada's aggressive rate rises, but home prices have also been declining in the Canadian housing market. The New Housing Price Index (NHPI) for Canada fell on a monthly basis in October 2022 for the first time since November 2019. In November 2022, the same monthly drop persisted. The cost of borrowing will increase as mortgage rates continue to climb as a result of rate increases by the Bank of Canada and rising bond yields. The Bank of Canada raised interest rates by 0.50% in December 2022, pushing prime rates up to 6.45%, the highest level since early 2001. Continued rate increases will have an effect over the upcoming months.
In the meantime, when the Federal Reserve accelerated its own aggressive rate-hike program in October, the USD/CAD exchange rate reached fresh highs. In July 2021, the CMHC (Canada Mortgage and Housing Corporation) reversed lending guidelines that had previously imposed limitations on mortgage insurance, including credit score requirements and debt service caps. This change made CMHC insurance more available, which facilitated borrowers' eligibility for a mortgage with CMHC insurance. In addition, it is now more difficult to get a mortgage due to a rise in the benchmark rate for the mortgage stress test that took effect on June 1, 2021. A decline in the affordability of their mortgage will be noticeable by potential homeowners when fixed-mortgage rates increase over 4.00% and the mortgage stress test rises above 5.25%.
North America Residential Construction Industry Overview
North America's housing construction market is highly fragmented, with no player having a significant share to influence the market. The market has many house manufacturers and service providers. The market presents opportunities for the growth of the companies during the forecast period, which is expected to further drive market competition. The market is expected to grow during the forecast period due to increased prefabricated housing construction investments, upcoming major projects in the country, and other factors. Major players are Lennar Corporation, D. R. Horton, PulteGroup, NVR, Mill Creek Residential, and Taylor Morrison.
North America Residential Construction Market Leaders
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Lennar Corporation
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D. R. Horton
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PulteGroup
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NVR
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Mill Creek Residential
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Taylor Morrison
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Meritage Homes Corp.
*Disclaimer: Major Players sorted in no particular order
North America Residential Construction Market News
- December 2022: In southeast Columbus, D.R. Horton intends to build homes for USD 215 million.
- December 2022: According to the company's fourth-quarter results call, Lennar Corp. has decided not to proceed with its plans to spin off its multifamily subsidiary, Quarterra, by the end of the year owing to adverse market circumstances.
- December 2022: At the southeast corner of Idlewild Street and Plantation Road in south Fort Myers, a 17-acre site is being cleared. According to Lee County documents, the area will be transformed into the 52-home neighborhood of Addison Square. The land was purchased by Pulte Homes for USD 2.4 million in a deal facilitated by Chuck Mayhugh of Mayhugh Commercial Advisors. The homes will vary in price from more than USD 500,000 and have 1,600 to 3,400 square feet of living space, with the majority of the homesites being grouped together along a sizable, central lake. According to Pulte executives, construction on the model houses should start by the spring, with some of them being done by the summer.
North America Residential Construction Market Report - Table of Contents
1. INTRODUCTION
- 1.1 Study Deliverables
- 1.2 Study Assumptions
- 1.3 Scope of the Study
2. RESEARCH METHODOLOGY
3. EXECUTIVE SUMMARY
4. MARKET INSIGHTS
- 4.1 Current Economic and Residential Construction Market Scenario
- 4.2 Technological Innovations in the Residential Construction Sector
- 4.3 Impact of Government Regulations and Initiatives on the Industry
- 4.4 Industry Value Chain Analysis
- 4.5 Comparison of Construction Cost Metrics of North American Countries (Analyst View)
- 4.6 Impact of COVID-19 on the Market
5. MARKET DYNAMICS
- 5.1 Drivers
- 5.2 Restraints
- 5.3 Opportunities
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5.4 Industry Attractiveness - Porter's Five Forces Analysis
- 5.4.1 Bargaining Power of Suppliers
- 5.4.2 Bargaining Power of Buyers
- 5.4.3 Threat of New Entrants
- 5.4.4 Threat of Substitute Products
- 5.4.5 Intensity of Competitive Rivalry
6. MARKET SEGMENTATION
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6.1 By Property Type
- 6.1.1 Single Family
- 6.1.2 Multi-family
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6.2 By Construction Type
- 6.2.1 New Construction
- 6.2.2 Renovation
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6.3 By Region
- 6.3.1 United States
- 6.3.2 Canada
- 6.3.3 Mexico
7. COMPETITIVE LANDSCAPE
- 7.1 Market Concentration Overview
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7.2 Company Profiles
- 7.2.1 Lennar Corporation
- 7.2.2 D. R. Horton
- 7.2.3 PulteGroup
- 7.2.4 NVR
- 7.2.5 Mill Creek Residential
- 7.2.6 Taylor Morrison
- 7.2.7 KB Home
- 7.2.8 Wood Partners
- 7.2.9 Meritage Homes Corp.
- 7.2.10 Alliance Residential
- 7.2.11 Clayton Properties Group
- 7.2.12 LMC Residential
- 7.2.13 The Michaels Organization
- 7.2.14 LGI Homes
- 7.2.15 Century Communities
- 7.2.16 Toll Brothers Building Company*
- *List Not Exhaustive
8. MARKET OPPORTUNITIES AND FUTURE TRENDS
9. APPENDIX
- 9.1 Macroeconomic Indicators (GDP Breakdown by Sector, Contribution of Construction to Economy, etc.)
- 9.2 Key Production, Consumption, Exports, and Import Statistics of Construction Materials
North America Residential Construction Industry Segmentation
The most important parts of the study report on the North American residential construction market are its analysis of the competition and information about consumers.In-depth looks at market trends, demand projections, and micro- and macroeconomic factors are also part of the research on the North American residential building market.The report also talks about the factors in the market that affect and limit the residential building business.This in-depth business intelligence study is built on qualitative and quantitative market measures. This report also offers readers industry insights and a thorough examination of market categories at potential micro levels. Builders and suppliers for the North American residential building sector are among the companies highlighted in the research.
The North American residential construction market is segmented by property type (single family and multi-family), construction type (new construction and renovation), and region (United States, Canada, and Mexico). The report offers size and forecasts for the North American residential construction market in terms of value (USD billion) for all the above segments. The impact of the COVID-19 pandemic is also covered in the report.
| By Property Type | Single Family |
| Multi-family | |
| By Construction Type | New Construction |
| Renovation | |
| By Region | United States |
| Canada | |
| Mexico |
North America Residential Construction Market Research FAQs
How big is the North America Residential Construction Market?
The North America Residential Construction Market size is expected to reach USD 0.85 trillion in 2024 and grow at a CAGR of 4.5% to reach USD 1.06 trillion by 2029.
What is the current North America Residential Construction Market size?
In 2024, the North America Residential Construction Market size is expected to reach USD 0.85 trillion.
Who are the key players in North America Residential Construction Market?
Lennar Corporation, D. R. Horton, PulteGroup, NVR, Mill Creek Residential, Taylor Morrison and Meritage Homes Corp. are the major companies operating in the North America Residential Construction Market.
What years does this North America Residential Construction Market cover, and what was the market size in 2023?
In 2023, the North America Residential Construction Market size was estimated at USD 0.81 trillion. The report covers the North America Residential Construction Market historical market size for years: 2019, 2020, 2021, 2022 and 2023. The report also forecasts the North America Residential Construction Market size for years: 2024, 2025, 2026, 2027, 2028 and 2029.
North America Residential Construction Industry Report
Statistics for the 2024 North America Residential Construction market share, size and revenue growth rate, created by Mordor Intelligence™ Industry Reports. North America Residential Construction analysis includes a market forecast outlook to 2029 and historical overview. Get a sample of this industry analysis as a free report PDF download.
