Building Inspection Services
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 7,600 building inspection service providers in the US evaluate all aspects of building structure and component systems and prepare reports on the physical condition of a property. In addition to inspection services, firms may provide expert witness testimony in court cases. Some building inspectors, especially home inspectors, are self-employed and may work part time.
Liability for Errors
Building inspectors expose themselves to liability related to errors or omissions when performing an inspection.
Dependence on Referrals
Referrals from real estate agents are in important source of business for home inspectors.
Industry size & Structure
The average building inspection services provider operates out of a single location, employs about 3 workers, and generates $592,000 annually.
- The building inspection services industry consists of about 7,600 firms that employ about 23,400 workers and generate about $4.5 billion annually.
- The industry is fragmented; the top 50 companies account for about 25% of industry revenue.
- Large firms may offer a wide range of testing, inspection, and certification services, including building inspection services. National Field Representatives offers property inspection service throughout the US. National Property Inspections is a large franchise operator. Most firms operate regionally.
- Some building inspectors, especially home inspectors, are self-employed and may work part time.
Industry Forecast
Building Inspection Services Industry Growth
Recent Developments
Jan 17, 2025 - Insurance Rates, Property Taxes Push up Homeowner Costs
- Many US homeowners are seeing their housing costs spiral higher amid rising insurance rates and property taxes, according to the Wall Street Journal. More frequent natural disasters and higher costs for home repairs have prompted insurance companies to increase premiums, while soaring home values have led to higher property taxes. According to Intercontinental Exchange, 32% of the average single-family mortgage payment was for home insurance and property taxes in September 2024, marking the highest rate for these costs since 2014. For about 9% of homeowners, insurance and taxes account for more than half of their monthly mortgage payments. Higher tax and insurance costs combined with elevated home prices and interest rates have prompted many would-be homebuyers to quit looking. A weak housing market can reduce demand for home inspections.
- In the third quarter of 2024, the volume of outstanding residential acquisition, development, and construction (AD&C) loans made by FDIC-insured institutions declined for the third quarter in a row, according to the National Association of Home Builders (NAHB). The value of residential AD&C loans in Q3 2024 was $490.7 billion compared to $495.8 billion in Q2 2024. The volume of residential AD&C loans is expected to rise in 2025 as the Federal Reserve continues its monetary easing policies, but potential headwinds include the federal deficit and economic uncertainty.
- Fitch Ratings’ US CMBS delinquency rate rose by 22 basis points to 2.98% in December 2024 from 2.76 in November. The December rise was driven by a rise in office maturity delinquencies and a reduction in resolution volumes. Commercial mortgage-backed securities (CMBS) are fixed-income investment products backed by mortgages on commercial properties rather than residential real estate. The delinquency rate is the percentage of commercial real estate loans that were 30 or more days past due or in foreclosure. A rising delinquency rate indicates that an increasing number of commercial property owners cannot pay the mortgages on those properties. Current and prior-month delinquency rates for December and November were: Office: 7.18% (from 6.28% in November); Retail: 3.96% (from 3.80); Hotel: 3.43% (from 3.64%); Multifamily: 0.77% (from 0.79%); Industrial: 0.37% (from 0.15%); Mixed Use: 4.43% (from 4.03%); Self-storage: 0.05% (from 0.01%); and Other: 1.00% (from 0.97%). An increase in commercial foreclosures can boost demand for commercial appraisal services.
- Older Americans’ preference for aging in place is expected to tighten the US housing market over the next decade, according to a recent report by the Mortgage Bankers Association’s (MBA) Research Institute for Housing America (RIHA). The homeownership rate among Americans over 70 has been rising since 2015; this, combined with the size of the Baby Boom generation, is leading to larger numbers of existing homes staying off the market. The report does not expect an excess supply of existing homes to come to market over the next decade due to older Americans moving or dying. Aging homeowners staying in their homes longer could boost demand for new homes if the existing home market remains tight.
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