LAS VEGAS – Economists speaking at the International Builders’ Show in Las Vegas provided some positive news to the audience when it comes to housing projections.

Rob Dietz, chief economist of the National Association of Home Builders (NAHB) told the crowd that single-family housing production should register a slight uptick in 2025. He said that builders are contend with conflicting market conditions – policy moves expected to aid the business climate in the areas of regulatory reform and extension of the 2017 tax cuts coupled with tariff and immigration actions that could have an adverse impact on housing costs and supply. 

And while economists speaking at the show cited those economic factors, other developments such as high shelter inflation that accounts for more than half of the increase in the overall Consumer Price Index, and tight lending conditions for construction and development loans, will continue to weigh heavily on the housing market in 2025.

“Home builders and remodelers are dealing with positive and negative risks in the months ahead,” said Dietz. “With shelter inflation still rising at a 4.4% annual clip and a housing shortage of roughly 1.5 million units, the best way to bend the rising housing cost curve is for the Trump administration and Congress to enact policies that will allow builders to construct more attainable, affordable housing.”

NAHB’s 10-point housing plan
Dietz outlined a 10-point housing plan to address issues such as the need to eliminate excessive regulations, promote careers in the skilled trades and fix building material supply chains, among other issues. 

He said that with the Federal Reserve mulling future risks to both inflation and unemployment, NAHB is forecasting that mortgage rates will unevenly trend toward 6% by the end of next year, but the "process won’t be smooth, with rates anticipated to move sideways or even lurch higher at times over the next year if the nation experiences larger fiscal deficits.

In addition, he said that as "positive (regulatory reform and tax cuts) and negative (tariffs and immigration) policy scenarios rise, single-family starts are set to inch up 0.2% this year to an annual rate of 1.01 million units and rise an additional 4% in 2026 to a 1.05 million pace."

On the multifamily front, construction should stabilize later this year as lower short-term interest rates improve the financing outlook for apartment development. NAHB is forecasting an 11% decline in multifamily output this year to a 317,000 annual pace with multifamily starts rising 6% next year to 336,000 units.

Meanwhile, with an aging housing stock and record levels of home equity, there are positive growth prospects for remodeling. NAHB anticipates residential remodeling will expand 5% in 2025 and an additional 3% in 2026.