Residential Building Contractors

The 207,400 residential building contractors in the US build single and multi-family homes (condos and townhouses) and provide remodeling services. The majority of new single-family homes are speculative homes, in which the contractor owns the land and begins construction without a sales contract. Contractors that build speculative homes are known as operative builders. About 78% of residential building contractors are solo operators.

Reliance On Credit Markets

The availability of credit affects potential buyers’ ability to secure a mortgage and contractors’ access to capital.

Reliance On Subcontractors

Residential building contractors rely on subcontractors for a high percentage of work.

Sep 20, 2026 - Canadian Plywood Faces 50% US Tariff

• A new 50% US tariff covers numerous Canadian products, including 36 types of plywood, The New York Times reports. US home builders have said domestic production is insufficient to replace Canadian plywood, raising the prospect of higher construction costs as the duties take effect. Builders already managing elevated material and financing costs may face additional pressure on project budgets, particularly where plywood and related wood products account for a meaningful share of framing and sheathing expenses. Higher input costs can make it harder to preserve margins or maintain home prices aimed at affordability-sensitive buyers.
• Home builders are facing growing litigation over mold that homeowners attribute to construction defects, according to The Wall Street Journal. Homeowners have alleged problems, including improperly sized HVAC systems, incorrectly installed windows, and poor attic ventilation, while builders and defense attorneys dispute some health claims, testing methods, and responsibility for moisture problems. Modern energy-efficiency requirements can also leave tightly sealed homes less able to dry when installation errors occur. Mold disputes can increase warranty, insurance, legal, and remediation costs for residential contractors and reinforce the importance of moisture management, ventilation, window installation, and quality-control practices throughout construction.
• The national median price of a new single-family home was $410,700 in the second quarter, $25,000 below the existing-home median of $435,700, according to the National Association of Home Builders. NAHB says regional and compositional differences help explain the unusual relationship, while builders have responded to affordability pressures with smaller lots, smaller homes, and buyer incentives. The new-home median declined 1.3% from a year earlier. Continued efforts to reach price-sensitive buyers can encourage residential contractors and builders to emphasize smaller footprints, cost-efficient designs, and tighter control of construction expenses.
• FMI's third-quarter 2026 North American Engineering and Construction Outlook indicates continued pressure on US residential construction in 2026, with improvement spending providing the main source of growth. Overall, residential construction spending is projected to be flat in 2026, as weakness in single-family and multifamily construction offsets solid home improvement spending. Single-family spending is forecast to fall 4% in 2026 to $409 billion, as elevated mortgage rates, weak builder sentiment, and widespread incentives constrain activity. Multifamily spending is expected to decline 1% to $127 billion as the development pipeline reaches the bottom of a two-year correction, although improving occupancy and lending conditions support a return to growth in 2027. Residential improvement spending is forecast to rise 5% to $404 billion as homeowners use accumulated equity for renovations, while an aging housing stock supports ongoing replacement demand.

Industry size & Structure

The average residential building contractor employs 5 workers and generates about $2.9 million in annual revenue.

• The residential building contractor industry consists of about 207,400 companies that employ about 943,100 workers and generate $599 billion annually.
• An additional 839,793 solo-practitioners generate $86 billion annually.
• Remodelers account for 62% of establishments; single-family general contractors are 27%; operative builders are 9%; and multi-family contractors are 2%.
• While residential construction includes private and public projects, the vast majority of work is in the private sector.
• About 80% of residential building contractors employ fewer than 5 workers and together cover 20% of the industry's payroll. Less than 1% of establishments are very large, employing over 500 workers each and together cover 18% of industry payroll.
• Large companies include D.R. Horton, Pulte Homes, Lennar Corporation, NVR, and KB Home.