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Demand for small-scale builders and boutique firms will grow as younger home buyers enter the market.

While publicly traded builders may get more media attention, home building isn’t a one-size-fits-all business. In fact, small-scale builders are front and center in most housing markets. Among NAHB members, 84% started 25 or fewer single-family homes last year. And 69% of members started 10 or fewer single-family homes in 2017.

I believe demand for the services of small residential construction firms will continue to grow as younger Americans enter the housing market or trade up to a larger home. It may be easy to think that the technology-minded younger generations will not be interested in buying a house from a mom and pop shop. But small-scale builders have an important edge in the market. They are members of the communities where they build homes. They see their customers at the grocery store, at school and sporting events, and at places of worship. Being so ingrained in the fabric of the community gives these builders a unique insider’s view on what local consumers want in a house. That depth of knowledge and one-on-one attention provided by smaller companies will keep customers coming back generation after generation.

The press has focused a lot on millennial home buyers, who are poised to dominate the market in the near future. While these buyers are generally on a tighter budget than their older counterparts, there is a subset of move-up millennial buyers who want specific amenities for their next home. After sacrificing a lot of their wish list just to get into the market, they want their trade-up house to include the kinds of photo-op features that wow them on Instagram, Pinterest, and Houzz.

Millennials are not the only demographic gaining traction in the housing market. Homeownership rates among all age groups under 54 have increased over the past year, with people aged 45-54 making the most gains. Generally speaking, these customers are able to invest more in their new homes and are less likely to compromise on features that they prefer.

To build the high-quality, customized homes these buyers want means home builders have to stay current with the latest housing trends. To do so, I encourage you to attend the 2019 International Builders’ Show, which will be held Feb. 19–21 in Las Vegas. IBS attendees with full registration or a one-day education pass can choose from more than 130 education programs covering all areas of home building. They can also check out the expo floor where more than 2,000 exhibiting brands will be on display and visit the two IBS show homes: the New American Home and the New American Remodel.

I was recently in London promoting the use of the National Green Building Standard when I saw an article in the London Times referring to small-scale firms as “boutique” firms. I never considered this term before, but it certainly applies to the majority of NAHB’s members.

As first-time and move-up buyers search for a new home, many may turn to boutique builders. More consumers have a specific vision for their home—and we have the opportunity to provide it for them. The customization we offer separates us from the pack. It ensures that we will continue to be a large and important part of the home building sector moving forward.

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