Home Inspection Market

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Home Inspection Market

Key Takeaways

  • The use of technology, the increasing awareness among home sellers and buyers, the Growing demand are some trends shaping the home inspection market in the United States.
  • Between 2020 and 2022, the states with higher demand for construction and building inspectors are California (1,600), Texas (1,570), Florida (1,170), New York (1,060), and Pennsylvania (840). Between 2018 and 2028, the states with higher demand for construction and building inspectors are Texas (1,720), California (1,510), New York (1,330), Florida (1,130), and Pennsylvania (850).
  • According to the Bureau of Labor Statistics (BLS), the number of construction and building inspectors will increase by 3% between 2019 and 2029, growing from 120,800 in 2019 to reach 124,600 by 2029. The states with the highest employment levels for construction and building inspectors are Texas, California, Florida, New York, and Pennsylvania. The states with lower employment levels for construction and building inspectors are Rhode Island, Alaska, South Dakota, Vermont, and North Dakota.

Introduction

This research analyzes the home inspection market and workforce in the United States. It explains six trends in the home inspection market in the United States. Moreover, the research provides insights into the home inspection market and workforce, including the number of workers entering/exiting the market, areas of the country with higher/lower demand for people in the professions, areas of the country where professional credentials are more/less valued, and changes/trends in requirements for the job.

The research carries on to find the number of home inspectors in each state using data pulled from the Bureau of Labor Statistics occupational categories (e.g., Construction & Building Inspectors). These figures were added to the attached spreadsheet.


US Home Inspection Market Trends

1- Use and Impact of Technology

  • From gathering online reviews by home buyers to online cloud-based apps used by inspectors to perform inspections, "technology is already pervasive in the home inspection industry." The home inspection market benefited from technology tremendously.
  • The usage of technology is expected to increase in the near future. "There are different technologies like AR/VR, AI, ML that will be leveraged to its fullest to simplify the job of the home inspectors." These technologies include Virtual reality headsets to generate inspection videos and Machine learning algorithms to analyze and provide a final report.
  • "Technology Is Changing the Home Inspection Industry." Some technologies are:

2- Growing Demand

  • The home inspection market has been growing since the late 1990s. "As the demands of the home-buying public and the regulations regarding real estate have evolved, more and more people have been turning to home inspectors whenever they undertake real estate transactions." Ninety-five percent of sold homes sales involved home inspection.
  • According to the Bureau of Labor Statistics (BLS), employment in the construction and building inspection market grow 3% from 2019 to 2029, creating 3,900 job opportunities between 2019-2029. The main reasons behind this growing demand are the "public interest in safety and the desire to improve the quality of construction."

3- Increasing Awareness among Home Buyers and Sellers

  • Seventy-two percent of Americans think a home inspection is advantageous, as it greatly helps to prevent potential problems associated with buying new houses, according to Forbes.
  • According to Dan Steward, president of Pillar To Post Home Inspectors, home buyers are more educated about the value and importance of home inspections. "Instead of just another task their agent assigns, they’re becoming much more aware of what purpose the home inspection process has, and how much it means to the sale or acquisition of their homes."
  • In fact, 60% of homeowners prefer home inspection companies suggested by their real estate agents. "Nearly 78% of real estate agents prefer recommending home inspectors to clients. Almost 84% favor having the home inspection as a part of their purchase contract."

4- Impact of Related Markets

  • Growth in the housing market (housing starts and existing home sales) in the United States is driving the growth in home inspectors' demand. (Details here)
  • Due to low housing stock, housing starts rose by 7.0% in 2020 and are expected to increase 14.4% in 2021 as "the housing stock remains in dire need of new homes and high-income households have acquired high levels of savings during the pandemic. Accordingly, housing starts are expected to grow at an annualized rate of 6.1% over the five years to 2021." (Details here)
  • In 2020, the number of existing home sales was expected to increase at an annualized rate of 1.5% to reach 5.47 million. Low mortgage rates reduced the costs of purchasing a home, while the limited supply of homes led to an increase in house prices. "Still, these accomodative borrowing factors and a relatively low supply of new housing has ultimately led to an increase in existing home sales in 2020 and 2021. Accordingly, the number of existing home sales is forecast to rise at an annualized 1.2% over the five years, reaching 5.8 million in 2021." (Details here)
  • Other factors influencing growth in the building inspection industry are the US economy and the real estate market. Further, the improved economy will lead to lower unemployment rates, which will put more money in the hands of Americans and increase their ability to buy new houses.


US Home Inspection Market

1- Market Overview

  • Revenue
    • The revenue of building inspection services in the United States will increase from $2,578.39 million in 2020 to reach $3.417,9 million by 2024.
    • To calculate the Compound Annual Growth Rate (CAGR), we relied on this CAGR calculator. The starting value is 2,578,390,000 (2020), the ending value is 3,417,900,000 (2024), and the number of periods is 4 (years). Based on these figures, the calculator states that the CAGR would be around 7.3%.
  • Workforce
    • The BLS expects that the number of construction and building inspectors will increase by 3% between 2019 and 2029, growing from 120,800 in 2019 to reach 124,600 by 2029.
    • Home inspectors in the United States are more likely to be white men aged 50 years. About 80.7% of home inspectors are men, while only 15.6% are women. Nearly 74.3% of home inspectors are white, while 12.2% are Hispanic or Latino, and 7.7% are Black or African American.

2- Home Inspectors: Workforce Overview

  • Statistics
    • The InterNACHI found that half the home inspectors (50%) have a background in the building trades.
    • According to IBISWorld, the building inspection industry grew by 4.6% between 2012 and 2017, "with 38,489 people employed in the industry and 24,581 business operating." The industry will continue to grow through 2022 with lower growth rates.
    • Seventy-five percent of home inspectors are self-employed (work for themselves).
    • In 2020, the federal government in the United States spent $597,917,062 on building inspection services, awarding "520 contracts to 199 companies, with an average value of $3,004,608 per company."
  • Workers Entering/Exiting the Industry
    • The BLS estimates that 13,500 job openings for construction and building inspectors are projected annually over the next ten years. "Many of those openings are expected to result from the need to replace workers who transfer to different occupations or exit the labor force, such as to retire."
    • Thirty-two percent of home inspectors will retire in the next 12 months.
  • Areas with Higher/Lower Demand
    • The BLS allows users to find the projected employment growth for an occupation by state through its Projections Central. The database provides two types of projections: Long-Term Occupational Projections (2018-2028) and Short-Term Occupational Projections (2020-2022). We defined the states with higher demand as the states with higher average annual openings.
    • Between 2020 and 2022, the states with higher demand for construction and building inspectors are California (1,600), Texas (1,570), Florida (1,170), New York (1,060), and Pennsylvania (840). The states with lower demand for construction and building inspectors are South Dakota (30), Rhode Island (30), North Dakota (20), Vermont (20), and Wyoming (20).
    • Between 2018 and 2028, the states with higher demand for construction and building inspectors are Texas (1,720), California (1,510), New York (1,330), Florida (1,130), and Pennsylvania (850). The states with lower demand for construction and building inspectors are South Dakota (30), Rhode Island (30), Wyoming (30), Idaho (0), Louisiana (0), Mississippi (0), and Virgin Islands (0).
  • Areas where Professional Credentials are more/less Valued
    • The American Society of Home Inspectors listed "New Jersey, Nevada, North Carolina, North and South Carolina, Oregon, Wisconsin, and Texas" as the states with stringent rules on home inspection license acquisition.
    • In non-regulated states, home inspectors don't have to get the National Home Inspector Examination. The non-regulated states are California, Idaho, Utah, Wyoming, Colorado, Kansas, Minnesota, Iowa, Missouri, Georgia, Michigan, and Maine. Thus, we considered these states as being the states where professional credentials are less valued.
    • The map below shows the states that regulate the home inspector profession and requires license acquisition, which includes, in most cases, a "proof of compliance of American Society of Home Inspectors Standards and Ethics Examination and a proof of compliance of the Examination Board of Professional Home Inspectors National Home Inspector Examination."

3- Changes/Trends in the Profession's Requirements

  • To identify the changes in the professional requirements for construction and building inspectors, we relied on the job outlook provided by the BLS in 2021. We tried to access an archived version (from Oct 2012) of the website using the Wayback Machine and paste the 2021 job outlook link in the search bar. Next, we compared these requirements and concluded that the profession's requirements for the job haven't changed since 2012.
  • Education Requirements:
    • 2021: A high school diploma is required. "Some employers may seek candidates who have a bachelor’s degree in engineering or architecture or who have another postsecondary credential."
    • 2012: A high school diploma is required. "Employers also seek candidates who have studied engineering or architecture or who have a certificate or an associate’s degree that includes completion of courses in building inspection, home inspection, construction technology, and drafting."
  • Training Requirements:
    • 2021: "Training requirements vary by state, locality, and type of inspector. In general, construction and building inspectors receive much of their training on the job. Construction and building inspectors learn building codes and standards as a prerequisite to obtaining their license and through continuing education."
    • 2012: "Training requirements vary by type of inspector, state, and local jurisdictions. In general, construction and building inspectors receive much of their training on the job, although they must learn building codes and standards on their own."


Number of Home Inspectors by State

1- Number of Construction & Building Inspectors by State

  • The BLS expects that the number of construction and building inspectors will increase by 3% between 2019 and 2029, growing from 120,800 in 2019 to reach 124,600 by 2029.
  • To find the number of construction & building inspectors, we used the "BLS Occupational Employment and Wage Statistics Query System," which is a search tool that allows users to create customized tables.
  • The latest data from the BLS is from May 2020. Below is the number of construction & building inspectors in each state. These numbers were also added to the attached spreadsheet, along with an explanation of how to use the BLS search tool.
    • Alabama: 1,330
    • Alaska: 230
    • Arizona: 2,810
    • Arkansas: 870
    • California: 9,900
    • Colorado: 3,250
    • Connecticut: 1,110
    • Delaware: 510
    • District of Columbia: 350
    • Florida: 9,330
    • Georgia: 2,500
    • Hawaii: 800
    • Idaho: 370
    • Illinois: 1,890
    • Indiana: 1,480
    • Iowa: 780
    • Kansas: 750
    • Kentucky: 660
    • Louisiana: 1,580
    • Maine: 460
    • Maryland: 3,250
    • Massachusetts: 2,780
    • Michigan: 4,000
    • Minnesota: 1,330
    • Mississippi: 560
    • Missouri: 3,160
    • Montana: 330
    • Nebraska: 460
    • Nevada: 910
    • New Hampshire: 410
    • New Jersey: 4,450
    • New Mexico: 500
    • New York: 8,590
    • North Carolina: 5,060
    • North Dakota:150
    • Ohio: 2,580
    • Oklahoma: 2,050
    • Oregon: 1,250
    • Pennsylvania: 6,050
    • Puerto Rico: 540
    • Rhode Island: 250
    • South Carolina: 1,690
    • South Dakota: 190
    • Tennessee: 1,370
    • Texas: 11,180
    • Utah: 840
    • Vermont: 180
    • Virginia: 4,200
    • Washington: 2,910
    • West Virginia: 530
    • Wisconsin: 1,310
    • Wyoming: 280

2- States with the Highest and Least Employment Levels

  • The states with the highest employment level for construction and building inspectors are Texas, California, Florida, New York, and Pennsylvania.
  • The states with the least employment level for construction and building inspectors are Rhode Island, Alaska, South Dakota, Vermont, and North Dakota.


Research Strategy

For this research on the home inspection market in the United States, we leveraged the most reputable sources of information that were available in the public domain, including government databases, industry-related studies, market reports, statistic portals/databases, and trusted media articles. In pursuit of this strategy, we checked government websites, such as the Bureau of Labor Statistics (BLS). Moreover, we leveraged industry-related websites and associations, such as the Association of Construction Inspectors (ACI), the American Society of Home Inspectors (ASHI), and the International Association of Certified Home Inspectors (InterNACHI®). We also scoured research websites like Research Gate, Market Watch, Business Wire, and PR News Wire. We also checked consulting websites such as Statista, Deloitte, KPMG, Accenture, and McKinsey, and media websites like Reuters and Forbes.

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