Imagine a single industry so colossal that its $907 billion annual output not only builds our homes but also powers 3.8% of the entire US economy and supports over a million jobs.
Key Takeaways
- In 2023, the US residential construction market size was valued at $907 billion, representing 3.8% of GDP
- Residential building construction spending in the US reached $899.1 billion in 2023, up 7.2% from 2022
- The residential construction sector contributed $2.1 trillion to the US economy in 2022 through direct, indirect, and induced effects
- US housing starts totaled 1.41 million units in 2023, a 5.4% increase from 2022
- Single-family housing starts reached 1.00 million units in 2023, up 9.4% year-over-year
- Multifamily starts were 414,000 units in 2023, down 6.8% from 2022 peak
- Employment in US residential building construction was 691,000 in 2023 average
- Construction laborers in residential sector numbered 378,000 in 2023
- Carpenters employed in residential construction totaled 212,000 in 2023
- Average new single-family home price was $509,300 in 2023
- Material costs for residential construction rose 5.1% in 2023
- Lumber prices averaged $486 per thousand board feet in 2023, down from 2022 peak
- 67% of builders reported using modular construction techniques in 2023
- Energy-efficient homes demand grew 15% in 2023 per consumer surveys
- Smart home tech integration in 45% of new residential builds in 2023
The residential construction industry contributes trillions to the economy while facing persistent labor shortages.
Costs, Materials, and Pricing
1Average new single-family home price was $509,300 in 2023
Verified2Material costs for residential construction rose 5.1% in 2023
Verified3Lumber prices averaged $486 per thousand board feet in 2023, down from 2022 peak
Verified4Lot costs represented 23.8% of total single-family home sales price in 2023
Directional5Labor costs accounted for 27.1% of construction cost in Q4 2023 NAHB survey
Single source6Finished lot price averaged $85,139 for single-family homes in 2023
Verified7Builder financing costs rose to 16.5% of sales price in 2023
Verified8Soft costs like permits and fees were 7.8% of total home price in 2023
Verified9Average resale home price increased 5.2% to $389,800 in 2023
Directional10Construction cost per square foot for single-family homes was $158 in 2023
Single source11Gypsum products prices up 8.4% YoY in residential builds 2023
Verified12Ready-mix concrete costs rose 4.7% in 2023 for residential use
Verified13Insulation material costs increased 6.2% in 2023
Verified14Plumbing fixtures prices up 3.9% YoY in 2023 residential market
Directional15Electrical wiring costs averaged $12.50 per foot in 2023 installs
Single source16Roofing materials cost per square was $450 average in 2023
Verified17HVAC systems for new homes averaged $12,000 installation cost 2023
Verified18Window and door costs represented 4.2% of build cost in 2023
VerifiedCosts, Materials, and Pricing Interpretation
The dream of owning a new $500,000 home is being meticulously assembled, board by expensive board, by a frustratingly resilient alliance of lumber yards, electricians, and a plot of land that costs more than your parents' first house.
Employment and Workforce
1Employment in US residential building construction was 691,000 in 2023 average
Verified2Construction laborers in residential sector numbered 378,000 in 2023
Verified3Carpenters employed in residential construction totaled 212,000 in 2023
Verified4Average hourly wage for residential construction managers was $52.14 in 2023
Directional54.2% unemployment rate in construction industry including residential in 2023
Single source6Residential builders reported 85% difficulty finding skilled labor in 2023 NAHB survey
Verified7250,000 worker shortage projected for residential construction by 2025
Verified8Women represented 10.9% of residential construction workforce in 2023
Verified9Hispanic or Latino workers made up 34.1% of construction laborers in residential in 2023
Directional10Job openings in construction averaged 383,000 monthly in 2023
Single source11Quit rate in construction was 2.8% monthly average 2023
Verified12Average residential construction worker tenure was 3.8 years in 2023
Verified13Training programs enrolled 45,000 new entrants into residential trades in 2023
Verified14Median age of residential construction workers was 42.5 years in 2023
Directional15Overtime hours averaged 3.2 per week for residential laborers in 2023
Single source16Total residential construction payroll was $45.2 billion in Q4 2023
Verified17Drywall installers in residential earned $27.45 median hourly in 2023
Verified18Electricians in residential construction averaged $31.22 hourly wage 2023
VerifiedEmployment and Workforce Interpretation
While residential construction may be booming with billions in payroll and high wages, it's precariously propped up by a graying, overstretched workforce desperately searching for a quarter-million new recruits to literally build the future.
Housing Starts and Permits
1US housing starts totaled 1.41 million units in 2023, a 5.4% increase from 2022
Verified2Single-family housing starts reached 1.00 million units in 2023, up 9.4% year-over-year
Verified3Multifamily starts were 414,000 units in 2023, down 6.8% from 2022 peak
Verified4Building permits issued for new residential construction totaled 1.46 million units in 2023
Directional5Single-family permits averaged 978,000 units annually in 2023
Single source6Housing completions reached 1.43 million units in 2023
Verified7In the South region, housing starts were 620,000 units in 2023, 44% of national total
Verified8Northeast single-family starts totaled 84,000 units in 2023
Verified9Midwest multifamily permits were 92,000 units in 2023
Directional10West region saw 1.02 million total residential permits in 2023
Single source11Housing starts under construction averaged 971,000 units in 2023
Verified12February 2024 single-family starts were 1.03 million SAAR, up 11.5% from January
Verified13Permits for single-family homes in March 2024 were 949,000 SAAR
Verified14Total starts in Q1 2024 averaged 1.41 million SAAR
Directional152024 forecast predicts 1.43 million total housing starts in US
Single source16Single-family starts projected at 1.01 million for 2024
VerifiedHousing Starts and Permits Interpretation
While American builders are cautiously adding single-family homes to feed a hungry market, they’re pulling back on apartment projects, signaling a shift toward homeowners but leaving renters out in the cold.
Industry Size and Economic Impact
1In 2023, the US residential construction market size was valued at $907 billion, representing 3.8% of GDP
Verified2Residential building construction spending in the US reached $899.1 billion in 2023, up 7.2% from 2022
Verified3The residential construction sector contributed $2.1 trillion to the US economy in 2022 through direct, indirect, and induced effects
Verified4In 2023, new residential construction accounted for 1.2 million jobs directly in the US
Directional5Global residential construction market was projected to grow from $4.2 trillion in 2023 to $5.8 trillion by 2030 at a CAGR of 4.6%
Single source6US single-family homebuilding market share was 75% of total residential starts in 2023
Verified7Multifamily residential construction spending hit $117 billion in Q4 2023
Verified8Residential construction added $1.4 trillion in value-added output to the US economy in 2023
Verified9The sector's total economic impact multiplier was 2.3 for every $1 spent on residential construction in 2022
Directional10In 2023, residential construction represented 4.1% of US private fixed investment
Single sourceIndustry Size and Economic Impact Interpretation
The U.S. residential construction industry, a nearly trillion-dollar economic engine, masterfully demonstrates that building a single-family home not only puts a roof over someone's head but, with a powerful 2.3x economic multiplier, essentially builds two and a half rooms of the entire economy along with it.
Trends, Forecasts, and Consumer Preferences
167% of builders reported using modular construction techniques in 2023
Verified2Energy-efficient homes demand grew 15% in 2023 per consumer surveys
Verified3Smart home tech integration in 45% of new residential builds in 2023
Verified4Aging-in-place features requested by 82% of buyers aged 55+ in 2023
Directional5Open floor plans preferred by 84% of new home buyers in 2023 survey
Single source6Home office space desired in 91% of new single-family homes 2023
Verified7NAHB/Wells Fargo HMI index averaged 42 in 2023, indicating cautious outlook
Verified82024 single-family sales forecast at 4.5 million units
Verified9Sustainability features like solar panels in 28% of new homes 2023
Directional10Tiny homes market grew 12% in 2023 to $5.2 billion
Single source11Prefabricated homes sales up 20% YoY in 2023 US market
Verified123D-printed homes completed 15 projects in US by end 2023
Verified13Builder confidence for current sales conditions at 47 in Dec 2023 HMI
Verified14Traffic of prospective buyers index averaged 32 in 2023
Directional1576% of millennials prefer urban/suburban mixed-use developments 2023
Single source16Accessory dwelling units (ADUs) permitted increased 25% in 2023
Verified17Net-zero energy homes certifications up 18% to 1,200 in 2023
Verified18Virtual reality tours used by 62% of builders for marketing in 2023
Verified19Biophilic design elements in 55% of luxury new homes 2023
DirectionalTrends, Forecasts, and Consumer Preferences Interpretation
While builders cautiously navigate a lukewarm market, they are pragmatically piecing together the future home: a prefabricated, energy-efficient sanctuary where grandparents age in place, millennials work remotely in open spaces, and everyone is just one smart device away from forgetting where they left their keys.
Sources & References
- Reference 1NAHBnahb.orgVisit source
- Reference 2CENSUScensus.govVisit source
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- Reference 7RANDOMLENGTHSrandomlengths.comVisit source
- Reference 8NARnar.realtorVisit source
- Reference 9RSMEANSrsmeans.comVisit source
- Reference 10PRODUCERPRICEINDICESproducerpriceindices.bls.govVisit source
- Reference 11TRADINGECONOMICStradingeconomics.comVisit source
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- Reference 13ROOFINGCONTRACTORroofingcontractor.comVisit source
- Reference 14FURNACEPRICESfurnaceprices.caVisit source
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- Reference 17MARKETRESEARCHFUTUREmarketresearchfuture.comVisit source
- Reference 18MODULARmodular.orgVisit source
- Reference 19HUDUSERhuduser.govVisit source
- Reference 20NEWZEROHOMEnewzerohome.orgVisit source
- Reference 21CONSTRUCTIONDIVEconstructiondive.comVisit source
- Reference 22ARCHDAILYarchdaily.comVisit source