If you were hoping 2025 would be the year homebuilders flooded the market with new homes and finally brought prices down—well, let’s just say the universe had other plans. New data shows home construction just took a 10% nosedive, with single-family builds down 8% and apartment projects down 11%. The U.S. is already 4 million homes short (we only built 1.3 million last year), so this slowdown is like watching a restaurant run out of food… while you’re already starving. At this rate, the supply gap isn’t just sticking around—it’s growing.
What’s Causing the Slowdown?
Blame the usual suspects—high mortgage rates (hello, 6.87%), skyrocketing material costs, and labor shortages. But now, Trump’s trade war and immigration crackdowns are making things even messier. Tariffs on construction materials (particularly steel, aluminum, and lumber) could add up to $10,000 to the cost of building a home, according to the National Association of Home Builders (NAHB). And with immigrant labor making up 30% of the construction workforce, tighter immigration policies could make it even harder (and more expensive) to build homes.
Meanwhile, builder confidence is tanking—hitting its lowest level in five months, with industry outlooks downgraded from ‘good’ to ‘poor.’ homebuilders are more hesitant to take on projects, fearing higher costs and weaker demand due to affordability issues.
The Local Picture: A 50% Drop in Inventory
If you think this is just a national issue, think again. Locally, we’re down nearly 50% year-over-year, with just 306 homes on the market so far in 2025, compared to 608 this time last year. That’s a huge decline in available housing, making it even tougher for buyers in an already tight market.
What’s Next?
With fewer new homes being built, mortgage rates still high, and affordability at crisis levels, the housing market remains stuck in a vicious cycle. Until supply ramps up—or rates come down—home prices are likely to stay high while renters struggle to transition to homeownership. If you’ve been holding out for a break in the market, you might be waiting a while.
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