December Foundations Newsletter

2025 New Construction Outlook: Key Insights for Builders to Thrive

As we look ahead to 2025, the housing market presents exciting opportunities for builders to adapt and thrive. Realtor.com’s forecast predicts a 13.8% increase in single-family housing starts, driven by a decade-long construction shortage. With political support for expanding the housing supply, now is the ideal time for builders to meet the rising demand for new homes and position themselves for growth.

A significant trend emerging in 2025 is the increasing demand for affordable, smaller homes. The share of new homes priced under $300,000 has grown substantially, creating opportunities for builders to attract first-time homebuyers. While changes in the political landscape may pose challenges—such as rising labor and material costs—builders who remain flexible and proactive in managing these shifts will be well-positioned for success in the coming year.

Read the 2025 Housing Forecast to discover how you can seize opportunities in the 2025 housing market.

New-Home Sales Rebound in November

November 2024 new-home sales show a strong rebound, rising 5.9% from October and 8.7% year-over-year to 664,000 homes. As existing home sales also improve, more buyers are turning to new construction, drawn by attractive prices— the median price fell 6.3% from last year to $402,600. Inventory is up, with new homes making up nearly 27% of all homes for sale, signaling a well-supplied market as we close out the year.

According to Joel Berner , Senior Economist from Realtor.com, for buyers and builders, the market is looking promising. With 25% of new-home sales priced under $300,000 and more move-in-ready homes available, buyers have more affordable options to choose from. This growing inventory, combined with competitive pricing, creates a favorable environment for both buyers and builders.

Learn more about the latest trends in new-home sales in our full article.

Building Boom Forecast for 2025: Number of Affordable New Homes Set To Soar, but Expect Them To Be Smaller

In 2025, builders are set to construct over 1.1 million new homes, a 13.8% increase from 2024. The focus is on affordability, with more homes priced under $300,000, though expect these homes to be smaller. Builders are also leveraging technologies like modular and 3D-printed homes to reduce costs and speed up construction, helping address the housing shortage.

While the outlook is positive, potential policy shifts could impact construction costs. Regulatory changes might boost land availability, but tariffs and labor shortages could raise costs. Builders and real estate professionals should stay informed to navigate the evolving market, as increased inventory and a more balanced buyer-seller dynamic present new opportunities.

To learn all the details builders and real estate professionals should be aware of, read this article.

In case you missed it: Empowering Women and Inspiring Greatness in Homebuilding

In case you missed it, Join Realtor.com’s Amy Martin and Marisa Kennerson as they sit down with Amy O'Connor , VP of Training Operations at Shore Consulting, Inc. and Founder of the Women's Leadership Circle.

In this insightful conversation, they discuss the vital role of women in the homebuilding industry, the impactful project "The House That She Built," and the powerful message of "Be brave, don’t settle." They also dive into today’s market trends and address the pressing question of buyer urgency.

You can watch now to gain valuable insights and inspiration.

Downloadable: Market Updates

Would you like to stay informed about what’s happening in a specific state, city, or zip code? Our Economic Team will keep you updated with the latest real estate data. Download the information you’re interested in and make informed business decisions based on this exclusive Realtor.com data.