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
Jul 19, 2024 - Growth to Flatten After 2025 Improvement
- The building inspection services are expected to see weaker sales growth this year, but demand is projected to improve in the following four years. The industry’s year-over-year sales increased by 14.3% in 2022 before dropping to 5.8% in 2023, according to Inforum and the Interindustry Economic Research Fund, Inc. Sales growth is projected to moderate further to about 2.6% in 2024, then rise to 3.9% in 2025. The industry will then see steady but mostly flat average annual growth of about 4.3% through 2028, according to Inforum and the Interindustry Economic Research Fund, Inc.
- Home builder confidence in the single-family market dropped in July to the lowest level since December 2023 amid high mortgage rates and elevated builder financing costs, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), fell one point to 42 in July 2024. Any HMI reading over 50 indicates that more builders see conditions as good than poor. The HMI survey also showed that 31% of builders have reduced home prices to lure potential buyers off the sidelines, although the average price reduction of 6% remained unchanged for the thirteenth consecutive month.
- Low- to medium-density multifamily building construction has grown to account for a larger share of the overall multifamily market in recent years, according to National Association of Home Builders analysis of US Census Bureau data. In 2024, there were 450,000 multifamily housing unit completions, marking the highest level in 37 years. Of those, 216,000 were buildings with fewer than 50 units, which was the largest share for low- to medium-density buildings since 2006.
- The number of building permits issued for privately-owned housing units, a demand driver for building inspection services, increased 3.4% in June 2024 over May but declined 3.1% year-over-year. June’s monthly gain was primarily driven by a 19.2% uptick in permitting for housing projects with five or more units, while single-family permits were down 2.3%. June permitting for buildings with five or more units fell 6.5% compared to June 2023, and single-family permitting was off by 1.3% over the same period. Total housing starts grew by 3% month-over-month but fell 4.4% year-over-year in June. Starts increased 22% in June over May for projects with five or more units, while single-family starts declined 2.2% over the same period. Single-family starts rose 5.4% in June compared to a year earlier, but developments with five or more units saw starts decline by 23.4% from June 2023 levels.
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