By Takayasu Kitagawa / Yomiuri Shimbun Staff Writer

Major Japanese home builders are rapidly expanding their businesses in the United States. The U.S. market is now becoming a key area for them as sales in the country are growing stably.

In Japan, it is inevitable that the detached house market will shrink because of the declining population. In contrast, demand for such houses is solid in the United States as its population is growing.

Daiwa House Industry Co. has been establishing a presence in the east, west and south of the United States, and has acquired three U.S. housebuilders since 2017. It supplied 7,095 houses in fiscal 2024 -- which ended in March this year -- 7.2 times the level in fiscal 2017. The Japanese company has adopted strategies that match the features of each region, such as income level. As a result, the company's sales in its detached house business in the United States grew to 607.8 billion yen in fiscal 2024, 9.7 times the level in fiscal 2017.

Daiwa House is now conducting centralized purchasing of construction materials and housing equipment in order to enhance its procurement capabilities and cost competitiveness. The company aims to supply 10,000 houses in 2026.

Sekisui House Ltd. acquired U.S. major home builder Woodside Homes Co. in 2017. The Japanese company sells houses in 14 states, and is achieving an annual supply of about 10,000 houses. The company's North American business accounts for about 30% of its consolidated sales.

Sekisui House is now focusing on selling houses built through its original construction method that leads to enhanced structural stability. The sturdy structure allows for more open areas and larger windows through the strategic placement of columns and beams.

The home builder also sells houses equipped with solar generation systems and that are well-insulated, gaining support from those who are environmentally conscious. The company is now reorganizing its local real estate subsidiaries to improve management efficiency, with the new management structure set to take effect in January.

Sumitomo Forestry Co. has placed its detached house business in North America as a key area for growth. It has a U.S. sawmill as a subsidiary, which gives the company an edge in timber procurement and offsite construction.

Growing U.S. Population

The United States saw net immigration of about 2.8 million people in 2024. Against a backdrop of population growth, estimates suggest that the country is facing a housing shortage of more than 3 million units. Demand for new detached houses remains solid despite the housing market showing signs of slowing due to factors including high mortgage rates.

"The population in the United States is relatively evenly dispersed, with a stable economy and employment even in regional cities," a source from the real estate industry said. "This makes it more likely for there to be housing demand even outside major metropolitan areas."

In contrast, Japan's housing market is saturated. Housing starts have declined from 1.67 million units in fiscal 1990 to 800,000 units in fiscal 2023. It is estimated to further drop to 610,000 units by fiscal 2040. According to Internal Affairs and Communications Ministry statistics, the number of self-build houses and ready-built houses are decreasing in the urban areas because of increases in single person households.

The construction of rental housing is becoming more and more prominent. The proportion of vacant houses is now 13.8%, and the figure may exceed 25% in 2043.

"Given the shrinking domestic market, it is inevitable that (Japanese) home builders pay more attention to overseas markets," said Naoya Onishi of Nomura Research Institute Ltd. Onishi pointed out that when Japanese housebuilders entered to China and Southeast Asia in the past, they sometimes faced difficulties in responding to local needs that differed from those in Japan. "They are now shifting to countries with stable incomes such as the United States. Going forward, the question will be how effectively they can cultivate the market."

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This article is from The Yomiuri Shimbun. Neither Dow Jones Newswires, MarketWatch, Barron's nor The Wall Street Journal were involved in the creation of this content.

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December 01, 2025 22:21 ET (03:21 GMT)

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