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16% of NAHB Builders Reported Building Age-Restricted Housing in 2025 – Eye On Housing

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Only 16% of NAHB builder members reported building age-restricted housing for people age 55 or older, according to 2025 Member Census. Even though it is down one percentage point from the previous year, this share has remained within a narrow band (15%-17%) since this question was introduced in the survey in 2009.

The likelihood of building age-restricted housing generally increases with the size of the company. Among builders with fewer than 100 starts in 2025, less than 20% build this type of housing, compared to 36% among those with 100+ starts. Additionally, there is some variation by the builder’s primary business activity. Fifty-two percent of those who manufacture modular/panelized/log home build age-restricted housing, compared to 17% of single-family builders and 29% of multifamily builders. In 2025, 47,000 housing units were started in age-restricted communities, which is up over 9% from the previous year.

In 20231, there were 25,849,000 households with a person 55 or over. Of these, 15% reported living in age-restricted communities (a record high since the inception of the series in 2015) and another 23% in communities where most neighbors are 55+.

The median age of homes for households with a person 55 or over in 2023 is 37.8 years, up 1.5 years from 2021 and nearly five years older than in 2015. When analyzing senior citizen communities by year home was built, 3.4% were built in 2020 or later while 25.6% were built before 1970. When compared to the overall housing stock (median age: 42 years), the median age for homes within senior citizen communities is approximately four years lower, mainly due to a lower share of homes built before 1970 and not necessarily due to a large increase in recent production (i.e., built 2020 or later).

For more details about NAHB builder members, please visit housingeconomics.com or click here for the full article.

This is the most recent survey results as of October 12, 2026.



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

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Cost of Materials Rises, Especially for Smaller Builders – Eye On Housing

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Material costs increased by 6.7% over the previous year, according to results from the survey for the July 2026 NAHB/Wells Fargo Housing Market Index (HMI).

A large majority (72.9%) of the builders responding to the survey reported that their cost of materials for the same house increased by up to 15% over the past year (at the time of the survey in early July). The most common response (28.4% of builders) was that material prices increased by 5% to 9.99%, followed by 22.4% who indicated a less than 5% change, and 22.1% who indicated 10% to 14.99%.

The median was an annual increase of 6.7% in material costs for the same house. This matches  the 6.7% annual increase in in the price of goods (including energy) used in new residential construction reported by NAHB in its recent post on the July Producer Price Index. If energy is excluded, the PPI for goods used in new residential construction increased by 5.0% over that period.

Not all builders experienced the same increase, however. According to the HMI survey, the median annual increase in material prices declines regularly with the size of the builder: from a high of 9.1% for builders who started 5 or fewer homes in 2025, down to only 1.8% for builders with 100 or more starts.

Several reasonable explanations for this tendency exist. For example, larger builders may have greater ability to stockpile materials when they anticipate price increases. Larger builders may also have longer-term contracts with suppliers, locking in current prices for an extended period. Finally, larger builders may be more likely to have special relationships with certain suppliers, allowing them to negotiate deferred price increases.

The price of materials is important, but it is only one of several factors creating housing affordability challenges in the U.S. Others include relatively high mortgage rates, shortages of skilled construction labor, and several different types of regulatory costs.



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

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Cost of Credit for Builders Up Since the End of 2025 – Eye On Housing

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Credit conditions on loans for residential Land Acquisition, Development & Construction (AD&C) were still tightening in the second quarter of 2026, according to NAHB’s quarterly survey on AD&C Financing. The net easing index derived from the survey posted a second-quarter reading of -12.0 (the negative number indicating net tightening). This marks the eighteenth consecutive quarter that residential builders and developers have reported tightening credit conditions.

In contrast, the similar net easing index based on the Federal Reserve’s survey of lenders moved slightly above zero, with a second-quarter reading of +3.7. This is the first time lenders reported easing credit conditions while builders and developers were simultaneously reporting tightening since NAHB began comparing the two series in 2013.

More details from the Fed’s survey of lenders—including measures of demand and net easing for residential mortgages—appeared in a previous post.

Among NAHB builders and developers who reported tighter credit conditions in the second quarter, 53% reported that one of the ways lenders tightened was by requiring personal guarantees or collateral not related to the project—putting the entire business, rather than just an individual project, at risk. Tied for second place on the list of common ways lenders were tightening (each reported by 47% of builders and developers) were increasing the interest rate, lowering the loan-to-value or loan-to-cost ratio, and refusing to make relationship loans.

Also in the second quarter, NAHB builders and developers generally reported a rising cost of credit, albeit with a few exceptions. The average contract rate increased on two of the four categories of loans tracked in the AD&C survey: from 7.42% to 7.77% on loans for land acquisition, and from 7.27% to 8.09% on loans for land development. Meanwhile, the contract rate actually declined at least slightly on the other two: from 7.31% to 7.28% on loans for speculative single-family construction, and from 7.19% to 7.01% on loans for pre-sold single-family construction.

On loans paid off as quickly as is typical in single-family construction, however, the initial points charged on the loans can be a particularly strong driver of overall credit cost. In the second quarter of 2026, average initial points increased on all four categories of AD&C loans: from 0.50% to 1.05% on loans for both land acquisition and land development, from 0.62% to 0.85% on loans for speculative single-family construction, and from 0.55% to 0.71% on loans for pre-sold single-family construction.

Those changes left the average effective interest rate (taking both contract rate and initial points into account) essentially unchanged at 11.67% (compared 11.68% in the first quarter) on loans for pre-sold single-family construction. On the other three types of AD&C loans, the average effective rate increased: from 9.36% to 10.43% on loans for land acquisition, from 10.15% to 12.59% on loans for land development, and from 11.22% to 11.82% on loans for speculative single-family construction. On all four categories of AD&C loans, the average effective rate in the second quarter of 2026 was over 0.6 percentage points higher than it had been at the end of 2025.

The role of elevated mortgage rates and their adverse effect on housing affordability have received considerable attention lately—for example, in Eye on Housing’s recent post on tepid existing home sales. Mortgage rates are not the only way the cost of credit affects housing markets, however. Access to AD&C credit at a reasonable cost plays an important role in enabling builders and developers to expand the supply of affordable housing.

More detail on credit conditions for residential builders and developers is available on NAHB’s AD&C Financing Survey web page.



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

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Acquisitions Increasing Among Home Builders – Eye On Housing

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At the start of 2026, most home builders predicted that high mortgage rates and hesitancy among buyers would be their toughest challenges this year. They weren’t wrong: the 30-year mortgage rate averaged 6.49% in June and housing demand has weakened, as reflected by flat mortgage applications in the first half of the year. As a result, new home sales are 7% behind this time last year and builders have put the brakes on production, starting 5% fewer homes than in the first half of 2025. Amid this tough business environment, when companies need to find efficiencies and economies of scale, the industry is experiencing increased levels of consolidation activity. So far in 2026 for example, Taylor Morrison was acquired by Berkshire Hathaway; Tri Pointe Homes by Sumitomo Forestry; and United Homes Group by Stanley Martin Home.

To better understand the extent of this phenomenon across a representative sample of builders in the country, the NAHB/Wells Fargo Housing Market Index survey asked about merger and acquisition (M&A) activity in August 2025 and again in June 2026. Results reveal an uptick in the share of builders reporting increased M&A activity in their local markets, from 14% in August 2025 to 21% in June 2026. More than 40% of builders, however, report no changes in consolidation trends in the markets where they operate. 

A second finding also points to somewhat higher levels of M&A activity in the industry: the share of builders who have been approached for acquisition and/or merger doubled between August 2025 and June 2026, from 9% to 18%. As a result, the segment who have not been approached at all dropped from 87% to 78% during this period.

When asked about future plans for growth, most builders (61%) plan to expand organically in their existing markets. Only small minorities plan to expand by acquisition (6%) or to be acquired by another company (5%). For additional details, please consult the full survey report.



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

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Credit for Builders Tightens in the First Quarter, But Only Slightly – Eye On Housing

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Credit conditions on loans for residential Land Acquisition, Development & Construction (AD&C) were still tightening in the first quarter of 2026, but only slightly, according to NAHB’s quarterly survey on AD&C Financing. The net easing index derived from the NAHB survey posted a first-quarter reading of -2.7. Although still negative (indicating that credit tightened since 2025 Q4), this is the closest the index has come to zero in the last four years.

Like the NAHB index derived from a survey of borrowers, a similar net easing index surveying lenders is produced from the Federal Reserve’s Senior Loan Officer Survey. This survey posted a reading of -4.9 in the first quarter of 2026, which was similarly still negative but fairly close to zero. The Fed considers anything between -5.0 and +5.0 “essentially unchanged.” Nonetheless, this marks the seventeenth consecutive quarter that both Fed and NAHB indices have been in negative territory.

More details from the Fed’s survey of lenders—including measures of demand and net easing for residential mortgages—appeared in a previous post.

Results on the cost of credit in the first quarter were mixed. The average contract rate on loans for pre-sold single-family construction increased slightly from 7.16% to 7.19% over the quarter.The other three categories of loans tracked in NAHB’s AD&C survey declined since the previous quarter: from 7.51% to 7.42% on loans for land acquisition, from 7.44% to 7.27% on loans for land development, and from 7.47% to 7.31% on loans for speculative single-family construction.   

Probably of greater significance were the changes in initial points charged on the loans, which can be particularly important on loans paid off as quickly as they typically are for single-family construction. The average initial points decreased from 0.70% to 0.50% on loans for land acquisition, but increased from some of the lowest percentages on record in the fourth quarter of 2025 for the other three categories of AD&C loans. The increases were from 0.44% to 0.50% on loans for land development, from 0.34% to 0.62% on loans for speculative single-family construction, and from 0.37% to 0.55% on loans for pre-sold single-family construction.

Those combinations of quarter-to-quarter changes caused the average effective interest rate (taking both contract rate and initial points into account) to decline from 9.81% to 9.36% on loans for land acquisition and from 10.28% to 10.15% on loans for land development, but to increase from 10.64% to 11.22% on loans for speculative single-family and from 11.01% to 11.68% on loans for pre-sold single-family construction.

Although results on the average effective interest rate were mixed on a quarter-to-quarter basis, the rate for each of the four types of AD&C loans has declined significantly since peaking in the period between 2023 Q3 and 2024 Q2.

Also in the NAHB AD&C survey, 35% of respondents who built single-family homes during the first quarter of 2026 reported financing some of their homes with a construction-to-permanent (one-time-close) loan made to the ultimate home buyer. On average, 51% of the homes these respondents built were financed in this manner.

More detail on credit conditions for residential builders and developers is available on NAHB’s AD&C Financing Survey web page.



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

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Builders Identify Key Long-Term Forces Shaping Housing Demand and Industry Health – Eye On

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Home builders are keenly aware of the complex long-term outlook ahead for the home building industry. A recent NAHB/Wells Fargo HMI survey asked builders to assess the impact of 14 major trends and forces on the health of the industry and housing demand over the next 10 years. Results show that home builders expect a mix of demographic, economic, and technological forces to exert significant, long-term influence on the industry. 

At one end, most builders consider five forces as strong or somewhat negative long-term risks to the industry and housing demand:

Government debt levels: 82%

Declining fertility rate: 78%

Long-term inflation outlook: 70%

Declining marriage rate: 67%

Energy costs: 61%

At the same time, builders identified several forces they expect to have a strong or somewhat positive impact on the health of the home building industry and housing demand over the next decade, led by structural and technological shifts:

Aging housing stock: 73%

Work-from-home trends: 65%

Artificial intelligence: 52%

Modular and panelized construction: 45%

These findings reveal that while long-term demographic trends and fiscal pressures are considered serious headwinds, builders also see meaningful opportunities to adapt related to an aging housing stock, evolving work patterns, and artificial intelligence. For additional details and results, please consult the full survey report.



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

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Cost of Credit for Builders & Developers at Its Lowest Since 2022 – Eye On Housing

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The cost of credit for residential construction and development declined in the fourth quarter of 2025,  according to NAHB’s quarterly survey on Land Acquisition, Development & Construction (AD&C) Financing. In particular, the average contract rate declined on all four categories of loans tracked in the survey: from 7.95% in the third quarter to 7.61% on loans for land acquisition, from 7.68% to 7.44% on loans for land development, from 7.89% to 7.47% on loans for speculative single-family construction, and from 7.90% to 7.16% on loans for pre-sold single-family construction.   

Meanwhile, the average initial points paid by builders and developers fell on three of the four types of AD&C loans: from 0.83% to 0.44% on loans for land development, from 0.75% to 0.34% on loans for speculative single-family construction, and from 0.67% to 0.37% on loans for pre-sold single-family construction. The only exception was loans specifically for land acquisition, on which the average initial points increased slightly—from 0.66% to 0.70%.

The small increase in points on land acquisition loans was not enough to offset the drop in the contract interest rate, however, so the average effective interest rate (which takes both the contract rate and initial points into account) declined across the board: from 10.15% to 9.81% on loans for land acquisition, from 10.92% to 10.28% on loans for land development, from 12.04% to 10.64% on loans for speculative single-family construction, and from 12.74% to 11.01%  on loans for pre-sold single-family construction.

In all four cases, this was the lowest the average effective rate has been since the period of generally rising interest rates in 2022.

Notwithstanding the drop in rates, builders and developers continued to report tightening credit conditions in the fourth quarter of 2025. The net easing index derived from NAHB’s AD&C survey posted a reading of -9.3 (the negative number indicating that credit has tightened since the previous quarter). This is quite similar to the results from the perspective of lenders reported in the Federal Reserve’s survey of senior loan officers. The net easing index derived from the Fed survey posted a reading of -1.8 in the fourth quarter. Both the NAHB and Fed survey have now reported consistently tightening credit conditions for 16 consecutive quarters. In both cases, however, the net easing index in Q4 2025  came closer to the break-even point of zero (between tightening and easing) than it has at any time since the first quarter of 2022. 

More details from the Fed’s survey of lenders—including measures of demand and net easing for residential mortgages—appeared in a previous post.

Also, in the NAHB AD&C survey, 35% of respondents who built single-family homes during the fourth quarter of 2025 reported financing some of the construction with a construction-to-permanent (one-time-close) loan made to the ultimate home buyer. On average, 59% of the homes these respondents built were financed in this manner.

More detail on credit conditions for residential builders and developers is available on NAHB’s AD&C Financing Survey web page.



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

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Builders’ Top Challenges for 2026 – Eye On Housing

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The most significant challenge builders faced in 2025 was high interest rates, as reported by 84% of builders in the latest NAHB/Wells Fargo Housing Market Index survey.  A smaller, albeit still significant share of 65% expect interest rates to remain a problem in 2026. The next four most serious issues builders faced in 2025 were buyers expecting prices/interest rates to decline (81%), concern about employment/economic situation (65%), the cost/availability of developed lots (63%), and negative media reports making buyers cautious (62%). Builders expect these challenges to persist with limited improvement in 2026.

In addition to those top tier challenges, 54% to 61% of builders also reported facing serious problems in 2025 with cost/availability of labor (61%), rising inflation in the US economy (59%) gridlock/uncertainty in Washington (58%), impact/hook-up/inspection and other fees (57%), and local/state environmental regulations and policies (54%). Looking ahead at 2026, fewer builders expect high interest rates (65%) rising inflation in the US economy (46%) to be a significant problem. On the other hand, builders don’t anticipate much change around labor shortages, uncertainty in Washington, fees, or local regulations.

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%), 2024 (91%) and 2025 (84%). Until 2021, relatively few builders reported problems with buyers expecting prices or interest rates to fall, but that share has been rising steadily for the past four years and reached a record high of 81% in 2025. In 2011, concern about employment/economic situation was reported as a significant problem by 79% of builders. This concern faded over the next decade, and by 2021, only 24% cited it as a top issue. But it has escalated rapidly since then, and in 2025 65% of builders rated it a major challenge – the highest since 2012.

The cost/availability of developed lots has been a serious challenge to most builders in 10 of the 15 years of the series history. In 2024 and 2025, the share reached 63%, matching the record high set in 2019. Negative media reports making buyers caution was a significant problem for 63% of builders in 2011. During the 2012–2021 period, the share consistently remained under 50%. From 2022 onward, however, most builders saw it as a serious challenge again, with the share reaching 62% in 2025 – the highest since 2011.

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



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

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Top Posts – Residential Remodelers Outnumber Single-family Builders in the U.S. – Eye On

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The number of residential remodelers in the U.S. has reached a record high of 128,187 establishments, 65% higher than the number of residential builders (single-family and multifamily), which stands at 77,455.  These official government counts were released by the U.S. Census Bureau as part of its 2022 Economic Census, which tallies American businesses every five years (in years ending in 2 and 7).

Growth in the number of remodelers significantly outpaced that of builders between 2017 and 2022. In that 5-year span, the remodeler count increased by 25% (102,818 to 128,187), while the number of builders grew at half that pace–by 12% (68,996 to 77,455).

A starker dichotomy emerges when comparing 2022 counts to those in 2007, prior to the financial crisis and the ensuing housing recession.  In that 15-year period, the official number of residential remodelers in the U.S. grew by 73% (73,888 to 128,187), while the official number of residential builders contracted by 21% (98,067 to 77,455).

Another way to analyze this data is by creating a combined universe of both builders and remodelers and then calculating each group’s share of the total. In 2022, for example, remodelers represented 62% of the total number of builders and remodelers in the U.S, while builders made up a minority share of 38%.  Remodelers have accounted for at least 60% of this total in the last three Economic Census (2012, 2017, and 2022). 

The last time builders comprised a majority share was in 2007, when they represented 57% of the combined total number of builders and remodelers in the country.



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

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Top Posts – Most Home Builders are Small Businesses – Eye On Housing

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Despite historically low self-employment rates and the rising market share of top ten builders, residential construction remains an industry dominated by independent entrepreneurs, with nearly 80% of home builders and specialty trade contractor firms being self-employed independent contractors. Even among firms with paid employees, the industry continues to be dominated by small businesses, with 63% of homebuilders and two out of three specialty trade contractors generating less than one million dollars in total business receipts. The new estimates are based on the 2022 Economic Census and Nonemployer Statistics data.

The Economic Census covers several construction subsectors within the home building industry:

 Residential Building Construction (RBC)

Single-family general contractors (excluding for-sale builders)

Multifamily general contractors (excluding for-sale builders)

For-sale new housing builders

Residential remodelers

Land Subdivision (or land developers)

Specialty Trade Contractors (STC)

The 2022 statistics show that the majority of residential construction businesses are self-employed independent contractors.  There are over 813,000 nonemployer firms in residential building construction (RBC), accounting for close to 80% of all establishments. In land subdivision, more than 9,000 independent contractors account for 68% of land subdivision firms.  Over 1.9 million specialty trade independent contractors make up 79% of all STC establishments. These nonemployer firms also account for almost half of the full-time employees (FTE) in residential building construction, 26% in land subdivision, and 28% in STC. 

Most of these self-employed mom-and-pop firms are very small, with annual receipts averaging under $103,000 for residential building construction, and under $70,000 for specialty trade contractors. Self-employed independent contractors in land subdivision average around $288,000 in annual business receipts. As a result, these nonemployer firms make up only 12% of all sales and receipts generated by residential building construction and land subdivision, and 9% of specialty trade contractors’ revenue.

Among residential construction businesses with paid employees, remodeling, land subdivision, and specialty trade subcontractors (STC) companies tend to be smaller.  Three out of four remodeling establishments, 63% of land developers, and 59% of STC companies generate under $1 million in receipts.  

Home builders are typically somewhat larger, with about 45% of companies reporting annual sales over $1 million. Among homebuilders, multifamily general contractors tend to be the largest. However, the Census Bureau did not disclose the number of the largest (with revenue over $100 million) and smallest (with revenue under $100K) multifamily and single-family custom builders in 2022. As a result, the revenue spectrum for MF and SF contractors is incomplete and is presented in a separate chart. 

Multifamily contractors are typically larger compared to single-family contractors and for-sale builders (who build on land they own and control). Ten percent of multifamily contractors reported annual sales between $10 million and 25 million, and an additional 11% earned between $25 million and $100 million in 2022.  

Under the most recent U.S. Small Business Administration (SBA) size standards, the vast majority of residential construction companies qualify as small businesses. The most recent small business size limits for all types of builders are $45 million, $34 million for land subdivision, and $19 million for specialty trade contractors. By these standards, almost all remodelers and single-family contractors, and at least 98% of land developers, and 96% of specialty trade contractors, easily qualify as small businesses. 



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

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