Economic growth forecasts for 2025 suggest greater stability, which is likely to have a positive impact on housing prices. According to the Joint Center for Housing Studies at Harvard, “annual expenditures for improvements and repairs to owner-occupied homes are expected to decrease this year and in the first quarter of 2025, but at a moderate pace, as published by its main indicator of remodeling activity (LIRA). You can also download this year's Construction Product Customer Guide below to learn more about the buying habits and business opinion of builders. According to the National Association of Home Builders, cumulative demand for housing is expected to be met between 2025 and 2030.
The psychology and emotions of homebuilders are just as crucial, if not more so, than understanding financial news and housing metrics. Home buyers and builders will need to consider the costs of building homes that are resilient to climate change and extreme weather events. These initiatives are aimed at alleviating the financial burdens of builders and encouraging more investment in new housing developments. As a result, more apartment buildings and townhouses may be built to accommodate this growing population.
Overall, while there may be a moderation in growth, the possibility of a fall in the domestic housing market in 2025 seems mitigated by increased supply and strong demand from millennials, unless an unexpected severe recession occurs. Therefore, understanding the specific type of builder you're interacting with is essential to adapt your product and marketing strategies effectively. As raw materials and labor are increasingly expensive, it is difficult for builders to meet the demand for affordable housing. Let's take a look at some indicators that show the evolution of single-family residential construction in 2025. Builders' confidence has currently fallen to 43% in June 2024, but housing construction is expected to pick up in 2025. Larger, more sophisticated builders or those involved in commercial projects operate differently compared to smaller builders.
