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The most significant challenge builders faced in 2024 was high interest rates, as reported by 91% of builders in the latest NAHB/Wells Fargo Housing Market Index survey.  A smaller, albeit still significant share of 78% expect interest rates to remain a problem in 2025. The next four most serious issues builders faced in 2024 were rising inflation in the U.S. economy (80%), buyers expecting prices/interest rates to decline (77%), the cost/availability of developed lots (63%), and the cost/availability of labor (61%).  Builders don’t expect much improvement in these challenges in 2025, except for rising inflation, which ‘only’ 52% see as a serious problem in the year ahead.

In addition to those top tier challenges, 55% to 60% of builders also reported facing serious problems in 2024 with gridlock/uncertainty in Washington (60%), building material prices (57%), concern about employment/economic situation (55%), impact/hook-up/inspection and other fees (55%), and negative media reports making buyers cautious (55%). Looking ahead at 2025, significantly fewer builders expect gridlock/uncertainty in Washington (32%) or have concerns about the employment/economic situation (39%).  In contrast, more builders are expecting building material prices to be a problem in 2025 (64%) and about the same expect continuing problems with impact and other fees (58%).

Builders have been asked about their most serious challenges every year since 2011. High interest rates have been a problem for a negligible share of builders (under 10%) during most years, except for 2022 (66%), 2023 (90%), and 2024 (91%).  When first introduced to the survey in 2021, 63% of builders reported challenges with rising inflation in the U.S. economy, but the share grew to at least 80% in 2022, 2023, and 2024. Prior to 2022, relatively few builders reported problems with buyers expecting prices or interest rates to fall, but that share rose to 49% in 2022, 71% in 2023, and 77% in 2024.

The cost/availability of developed lots has been a serious challenge to most builders in nine of the 14 years of the series history. In 2022, 51% of builders faced this problem; by 2024, 63% did—tying a record high set in 2019. Meanwhile, more than half of builders have reported the cost/availability of labor as a serious problem for the past 11 years in a row. While 82% and 85% of builders faced this challenge in 2021 and 2022, respectively, the share has eased to 73% in 2023 and to 61% in 2024.

For additional details, including a complete history for each reported and expected problem listed in the survey, please consult the full survey report.

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This article was originally published by a eyeonhousing.org . Read the Original article here. .



4. Historical Preservation

Bringing a fresh look to a historical home’s landscape while still maintaining some original charm means navigating a fine line between past and present.

Challenge: Designer Sara Yant of Twistleaf was tasked with reimagining outdoor spaces in the Historic District of Fredericksburg, Texas, including for a Queen Anne Victorian mansion, a carriage house, a five-unit barn conversion and three 1930s bungalows. “We needed to create a cohesive look that would complement the different architectural styles and prioritize an intuitive circulation between the spaces,” Yant says.

There were some hiccups along the way that impacted the original plan. A long-abandoned and crumbling drainage pipe beneath the mansion’s front yard was a safety risk. Stringent watering restrictions also were implemented for the Texas Hill Country during that time.

Solution: Yant replaced the fencing and gates with period-appropriate designs. She also updated the hardscape using a mix of concrete, bricks and decomposed granite to create paths and relaxing courtyards and retreats. Removing the crumbling pipe allowed her to reinforce the surrounding ground.

She finished the space with a mix of native and adapted plants that complement the architecture of the Queen Anne Victorian home. Black and blue sage and soft leaf yucca provide seasonal interest and attract butterflies and hummingbirds. American beautyberries (Callicarpa americana, USDA zones 6 to 10; find your zone), dwarf palmetto palms (Sabal minor, zones 7 to 10), aromatic aster (Symphyotrichum oblongifolium, zones 3 to 9) and inland sea oats (Chasmanthium latifolium, zones 3 to 8) define the restorative green retreat by the bungalows.

“We also reduced the amount of lawn in the original design and replaced several areas [including the space shown here], with Leavenworth’s sedge (Carex leavenworthii, zones 6 to 9) as a water-conscious solution,” Yant says.



This article was originally published by a www.houzz.com . Read the Original article here. .


With mortgage rates declining by more than one-half of a percentage point from early August through mid-September, per Freddie Mac, builder sentiment edged higher this month even as builders continue to grapple with rising costs.

Builder confidence in the market for newly built single-family homes was 41 in September, up two points from a reading of 39 in August, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). This breaks a string of four consecutive monthly declines.

Due to lower interest rates, builders now have a positive view for future new home sales for the first time since May 2024. However, builders will face competition from rising existing home inventory in many markets as the mortgage rate lock-in effect softens with lower rates.

With inflation moderating, the Federal Reserve is expected to begin a cycle of monetary policy easing this week, which will produce downward pressure on mortgage interest rates and also lower the interest rates on land development and home construction business loans. Lowering the cost of construction is critical to confront persistent challenges for housing affordability.

The latest HMI survey also revealed that the share of builders cutting prices dropped in September for the first time since April, down one point to 32%. Moreover, the average price reduction was 5%, the first time it has been below 6% since July 2022. Meanwhile, the use of sales incentives fell to 61% in September, down from 64% in August.

Derived from a monthly survey that NAHB has been conducting for more than 35 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

All three HMI indices were up in September. The index charting current sales conditions rose one point to 45, the component measuring sales expectations in the next six months increased four points to 53 and the gauge charting traffic of prospective buyers posted a two-point gain to 27.

Looking at the three-month moving averages for regional HMI scores, the Northeast fell three points to 49, the Midwest edged one-point higher to 40, the South decreased one point to 41 and the West increased two points to 39.

The HMI tables can be found at nahb.org/hmi.

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This article was originally published by a eyeonhousing.org . Read the Original article here. .

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