Top Builder Challenges of 2024 and for 2025

High interest rates and rising inflation were among the top problems that builders faced in 2024, with high interest rates remaining the top expected challenge this year, according to the National Association of Home Builders. 

According to NAHB’s survey of builders completed in January, the top concerns of 2024 were: 

1. High interest rates (91%)
2. Rising inflation in the U.S. economy (80%)
3. Buyers expect prices or interest rates will decline if they wait (77%)
4. Cost/availability of developed lots (63%)
5. Cost/availability of labor (61%)
6. Gridlock/uncertainty in Washington making buyers cautious (60%)
7. Building material prices (57%)
8. Concern about employment/economic situation (55%)
9. Impact/hook-up/inspection or other fees (55%)
10. Negative media reports making buyers cautious (55%)

Surveyed builders reported that they expected many of these concerns to persist this year, though they predicted some would be more of a concern than others. The top builder concerns expected for 2025 were: 

1. High interest rates (78%)
2. Buyers expect prices or interest rates will decline if they wait (74%)
3. Cost/availability of developed lots (65%)
4. Cost/availability of labor (64%)
5. Building material prices (64%)
6. Impact/hook-up/inspection or other fees (58%)
7. Rising inflation in the U.S. economy (52%)
8. Negative media reports making buyers cautious (43%)
9. Concern about employment/economic situation (39%)
10. Gridlock/uncertainty in Washington making buyers cautious (32%)

Notably, concern decreased in 6 of 10 categories, with inflation challenges dropping from the second biggest concern of 2024 to a projected seventh for 2025.

However, builders responded that they expected more challenges this year regarding construction costs specifically. They predicted more challenges concerning the cost/availability of developed lots, cost/availability of labor, building material prices and impact/hook-up/inspection or other fees.