Time to Build a Single-Family Home | Cross River Real Estate

With the end of 2016 approaching, NAHB’s Eye on Housing is reviewing the posts that attracted the most readers over the last year. In July, Na Zhao examined typical construction durations for various types of single-family homes and regions.

The 2015 Survey of Construction (SOC) from the Census Bureau shows that the average completion time of a single family home is around 7 months, which usually includes almost a month from authorization to start and another 6 months to finish the construction. The timeline from authorization to completion, however, is not consistent across the nation, depending on the housing category, the geographic location, and metropolitan status.

Among all the single-family houses completed in 2015, houses built for sale took the shortest time, 6 months to completion after obtaining building permits, while houses built by owners required the longest time, almost a year. Homes built for rent took 9 months from permit to completion, and those built by hired contractors normally needed around 8 months. A large proportion of single family homes for sale and on owners’ land built by contractors began construction within the same month after obtaining building authorizations. However, homes built for rent and built by owners had a one-month lag between permits and construction start in 2015.

The average time from authorization to completion also varies across the nation. New England division had the longest time of 10 months, followed by the Middle Atlantic of 9.6 months, East South Central, East North Central, and Pacific of 8 months in 2014. These four divisions all had above average time from permit to completion. The shortest period, 6 months, happened in the Mountain division, which also had the shortest waiting period from permit to construction start.

The metropolitan status indicates how long it takes to build a single-family home. Houses in metropolitan areas, on average, took nearly 7.5 months to completion, which was 2 months shorter than those in non-metropolitan areas. This pattern was quite consistent across the nation, except for the Middle Atlantic division where the average month to completion in metropolitan areas was longer than in non-metropolitan areas in 2015.

The SOC also collects sale information for houses built for sale, including the sale date when buyers sign the sale contracts or make a deposit. In 2015, the share of single-family sold while under construction was 66%, with 32% even sold before construction start and 12% sold during the same month of completion. The percent of single-family houses completed in 2015 stayed unsold at the first quarter of 2016 was only 6%.