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Builder Profits Nearing 2006 Levels

Monday, March 21, 2016

The average single family builder achieved revenue of just over $16 million in 2014 and posted an average net pre-tax profit of $1 million.  The National Association of Home Builders (NAHB) derived those numbers for its newly released Cost of Doing Business Study from a nationwide survey of builders about their income statements and balance sheets.

The cost of achieving that revenue, that is the cost of sales, averaged $13.2 million per builder or 81.1 percent of revenue.  Those costs include land and direct and indirect costs of construction.  This results in a gross profit of $3.1 million.  Operating expenses including the owner's draw, sales and marketing and general and administrative expenses took another $2 million.  The remaining net pre-tax profit represents a 6.4 percent profit margin.

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