The Tremendous Growth Kickstarts the New Year on a Positive Note

At BAGI, we understand the importance of keeping abreast of changing trends and conditions in the new home construction industry. We find that being proactive is the best way to prepare our members to weather market upsets and overcome challenges while also helping prospective home buyers on their journey to homeownership during these uncertain economic times.

MARKET TRENDS AND WHAT THEY TELL US

While we finished the last year steady, 2024 kicked off with tremendous growth! Year-over-year, there was a 77% jump in overall demand for new single-family home construction from the start of 2023 to the beginning of 2024.

We find that each 1% drop in interest rates equates to an approximate 10% drop in a homeowner’s monthly payments. For this reason, the gradual decline and stabilization of interest rates has sparked a new wave of demand from those who have been on the fence about purchasing a lot and building a home but now want to take advantage of lower rates to lower their mortgage payments.

New buyers will also benefit from the stabilization of vendor and supplier pricing. Since the industry-wide supply chain disruption starting in 2020, vendor pricing and supply availability has been all over the map, with pricing on a continuous upward climb and hit or miss availability for crucial supplies, like lumber. We are happy to report that, while prices continue to climb due to inflation, the price hikes are not as frequent or dramatic as they have been in previous years.

We still face supply challenges, but shortages are easing, and we are now better able to locate and secure the crucial supplies we need to build high quality homes. Labor shortages, however, continue to impact the housing market, with builders struggling to find skilled workers and retain their current workforce. This may impact the speed of construction and impact timelines for move-in.

Rest assured that BAGI member builders and suppliers are held to the highest standards for building quality and professionalism. This means that our members do not hire unskilled workers or cut corners. When you build or remodel with a BAGI member, you can trust that your project will be completed well and to your satisfaction, despite any supply or labor challenges builders may be facing.

To learn more about our standards and access our consumer resources, visit the Consumer section of our site to search for a builder, remodeler, or other service provider.