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Single-family built-for-rent (or built-to-rent, BTR) construction fell back in the first quarter of 2026, as a higher cost of financing, increased multifamily supply and policy concerns over Congressional legislation related to institutional capital froze parts of the development market. Fortunately, recent changes by the House of Representatives have addressed a harmful Senate proposal.

The legislation, as approved by the Senate, would have required institutionally financed new-construction single-family rental housing to be sold to individual home buyers within seven years. This requirement would decrease investable capital and lower housing supply. A preliminary NAHB estimate indicates the proposed rule places approximately 40,000 units per year at-risk. The House version of the bill removes this anti-supply provision. Nonetheless, concerns over the Senate version limited capital investment in the BTR sector at the beginning of 2026.

According to NAHB’s analysis of data from the Census Bureau’s Quarterly Starts and Completions by Purpose and Design, there were approximately 14,000 single-family built-for-rent (SFBFR) starts during the first quarter of 2026. This is down measurably from the first quarter of 2025 (19,000).

Over the last four quarters, 62,000 such homes began construction, which is a 26% decrease compared to the 84,000 estimated BTR starts for the prior four quarter period.

The BTR market is a source of inventory amid challenges regarding housing affordability and down payment requirements in the for-sale market, particularly during a period when a growing number of people want more space and a single-family structure. Single-family built-for-rent construction differs in structural characteristics compared to other newly-built single-family homes, particularly with respect to home size. However, investor demand for single-family homes, both existing and new, has cooled with higher interest rates.

Given the relatively small size of this market segment, the quarter-to-quarter movements typically are not statistically significant. The current four-quarter moving average of market share (just under 7%) is nonetheless higher than the historical average of 2.7% (1992-2012).

Importantly, as measured for this analysis, the estimates noted above include only homes built and held by the builder for rental purposes. The estimates exclude homes that are sold to another party for rental purposes, which NAHB estimates may represent another three to five percent of single-family starts based on industry surveys.

The Census data note an elevated share of single-family homes built as condos (non-fee simple), with this share averaging about 4% over recent quarters. Some, but certainly not all, of these homes will be used for rental purposes. Additionally, it is theoretically possible that some single-family built-for-rent units are being counted in multifamily starts, as a form of “horizontal multifamily,” given that these units are often built on a single plat of land. However, spot checks by NAHB with permitting offices indicate no evidence of this data issue occurring.

With the onset of the Great Recession and declines in the homeownership rate, the share of built-for-rent homes increased in the years after the recession. While the market share of SFBFR homes is small, it has clearly expanded. Given affordability challenges in the for-sale market, the SFBFR market will likely retain an elevated market share. However, in the near term, SFBFR construction is likely to be slow given market and policy headwinds.



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



Business activity softened across the residential construction and design industries at the start of 2026, but professionals are entering the second quarter with measured optimism, according to the Q2 2026 U.S. Houzz Pro Industry Barometer. Construction firms expect modest improvement driven by gains in newly committed projects, while architecture and design firms maintain positive expectations despite sharper declines in recent activity, particularly project inquiries.

The recently released Barometer provides timely insights into the residential renovation market, tracking expectations, project backlogs and recent business activity among construction and architectural and design services firms in the United States.

“After recent activity slowed in the first quarter compared with the end of 2025, construction and design pros are entering Q2 with cautious optimism, particularly in construction, where expectations for new projects are showing early signs of a rebound,” says Marine Sargsyan, head of economic research at Houzz. “At the same time, persistent cost pressures and client hesitation are reshaping how firms compete. We’re seeing pros adapt in real time, with construction firms investing in workforce development and more flexible pricing, while design professionals are doubling down on client experience and branding.”

Hopedale Builders, Inc.Save Photo

The U.S. Houzz Pro Industry Barometer tracks expected, current and recent business activity among businesses in the construction sector and the architectural and design services sector. The Q2 2026 Barometer was fielded March 17 through April 6, 2026, and garnered responses from nearly 1,000 home improvement firms on Houzz.

Here’s what construction and design industry professionals are reporting.

Blythe InteriorsSave Photo
A score higher than 50 indicates that more firms reported an increase in their business expectations than reported a decrease.

Construction Firms

1. Expectations improve modestly. The Expected Business Activity Indicator related to project inquiries and new committed projects increased 3 points to 58 for Q2 2026 (from 55 for Q1 2026). The quarter-over-quarter gain was driven by improved expectations for new committed projects, which rose to 59 (up from 53 for Q1), while project inquiries held steady at 57.

Trends diverge across firm types. Design-build remodelers report a strong rebound, with the indicator increasing 10 points to 66 (from 56 for Q1), supported by gains in both inquiries and newly committed projects. In contrast, build-only remodelers declined 5 points to 50 (from 55 for Q1), reflecting softer expectations across both components.

The indicator is based on survey questions about whether businesses expect the number of project inquiries and new committed projects to increase, decrease or remain unchanged in the coming three months compared with the previous three months.

See how Houzz Pro can help you find customers, manage projects and grow your business

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2. Project backlogs continue to ease year over year. The Project Backlog Indicator, which measures the average wait time before firms can begin new projects, declined to 5.6 weeks at the start of Q2 2026, down 0.8 weeks from 6.4 weeks a year earlier.

Build-only remodelers report a backlog of 4.6 weeks (down slightly from 4.8 weeks in Q2 2025), while design-build firms report 6.7 weeks, a more pronounced decline from 8.0 weeks last year and the primary driver of the overall contraction.

Although pipelines have shortened across both groups, design-build firms continue to report longer wait times than build-only remodelers. The trend suggests a gradual normalization following elevated backlog levels seen in prior years.

The Project Backlog Indicator is based on survey questions that ask businesses to report wait times (in weeks) to start work on a midsize project. Scores are computed as average wait times without seasonal adjustment.

J.P. Hoffman Design BuildSave Photo
A score higher than 50 indicates that more firms reported an increase in their recent business activity than reported a decrease.

3. Recent activity declines despite stabilizing inquiries. The Recent Business Activity Indicator fell to 48 in Q1 2026 (from 51 in Q4 2025), indicating that more firms reported declines than reported increases in activity. Project inquiries showed modest improvement, rising 2 points to 51, while new committed projects dropped sharply to 45 (from 52 for Q4), suggesting weaker conversion of demand into signed work.

Results again vary by firm type. Build-only remodelers reported an indicator reading of 50 (down from 59 for Q4), while design-build remodelers improved slightly to 46 (from 43 for Q4), reflecting gains in both inquiries and committed projects despite remaining below the 50-point threshold.

The Recent Business Activity Indicator looks at actual activity over the previous three months. In contrast with the Expected Business Activity and Project Backlog indicators, which look forward in time, the Recent Business Activity Indicator looks back. It’s based on survey questions about whether businesses observed an increase, a decrease or no change in the actual number of project inquiries and new committed projects over the previous three months relative to the three months prior.

Learn about Houzz Pro software

Innovative Design BuildSave Photo
A score higher than 50 indicates that more firms reported an increase in their business expectations than reported a decrease.

Architectural and Design Firms

1. Expectations remain positive but edge down slightly. The Expected Business Activity Indicator for architectural and design services firms decreased 1 point to 60 for Q2 2026 (from 61 for Q1), reflecting mixed forward-looking momentum.
Expectations for project inquiries declined to 60 (from 62 for Q1), while expectations for new committed projects increased slightly to 61 (from 60 for Q1).

Interior designers report growing optimism, with the indicator rising to 65 (from 61 for Q1), supported by gains across both inquiries and committed projects. Architects, meanwhile, saw expectations decline to 58 (from 61 for Q1), reflecting softer outlooks across both components.

Despite the modest dip, the index remains above the 50-point line, indicating that more firms anticipate improving business conditions than worsening ones.

2. Backlogs drop significantly across the sector. The Project Backlog Indicator declined to 4.0 weeks at the start of Q2 2026, down 1.7 weeks from 5.7 weeks one year earlier, signaling notably shorter pipelines. Architects experienced the largest contraction, with backlogs falling to 4.0 weeks from 6.3 weeks a year ago. Interior designers also reported declines, with wait times easing to 4.0 weeks from 4.8 weeks.

Backlog levels have now converged across both groups, suggesting a continued normalization of project pipelines after extended periods of elevated demand.

Charlie Allen Renovations, Inc.Save Photo
A score lower than 50 indicates that more firms reported a decrease in their recent business activity than reported an increase.

3. Recent business activity softens sharply. The Recent Business Activity Indicator declined to 48 in Q1 2026 (from 54 in Q4 2025), driven primarily by a drop in project inquiries.

Inquiry activity fell 9 points to 45, while new committed projects edged down slightly to 52 (from 53 for Q4), highlighting weaker near-term demand signals despite relatively stable project commitments.

Architects reported a more pronounced slowdown, with the indicator dropping to 45 (from 55 for Q4). Interior designers, however, posted modest improvement, rising to 53 (from 50 for Q4), supported by increases in both inquiries and newly committed projects.

Overall, results point to uneven performance across the design sector, with interior designers showing resilience while architects face more significant softening.

Bob Chatham Custom Home DesignSave Photo



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


Residential construction activity began 2026 on a mixed note, with single-family permitting weakening significantly while multifamily activity remained relatively stable. Higher borrowing costs and affordability constraints continue to weigh on single-family construction, while multifamily permitting shows signs of resilience despite regional variation.

Over the first month of the year, the number of single-family permits issued nationwide reached 62,034. On a year-over-year basis, this represents a 15.2 percent decline compared with the January 2025 total of 73,115. Multifamily permitting activity was essentially flat, with 38,215 permits issued nationwide, marking a 0.5 percent decline from the same period last year.

Regionally, year-to-date single-family permitting declined in all four regions in January. The Midwest declined by 9.1 percent, the Northeast fell 10.6 percent, the South declined 14.7 percent, and the West dropped 20.1 percent. Multifamily permits increased in three of the four regions, led by gains in the Northeast (up 39.4 percent), followed by the West (up 35.5 percent), and the Midwest (up 10.9 percent). The South saw a decline of 24.2 percent, driven largely by a 42.0 percent decrease in Atlanta-Sandy Springs-Roswell, GA metropolitan areas and a 39.0 percent drop in the Houston-Pasadena-The Woodlands, TX metropolitan area.

At the state level, seven states recorded year-over-year increases in single-family permits in January, with gains ranging from 25.5 percent in Montana to 0.4 percent in Washington. Connecticut reported no change. The remaining 42 states and the District of Columbia reported declines, led by the District of Columbia, which posted the steepest drop at 52.0 percent.

The ten states issuing the highest number of single-family permits accounted for 63.8 percent of all single-family permits issued nationwide. Texas led the country, with 9,580 permits issued at the start of 2026, although this represented a 21.3 percent decline compared with January 2025. Florida, the second-highest state, saw permits fall by 14.9 percent, while North Carolina, ranked third, experienced a decline of 9.8 percent.

Between January 2026 and January 2025, 26 states recorded increases in multifamily building permits, while 24 states and the District of Columbia experienced declines. Delaware posted the largest percentage increase, with multifamily permits surging 1,293.8 percent, rising from 16 to 223 units. In contrast, Wyoming recorded the steepest decline, with permits falling 100.0 percent, from 13 to zero units.

The ten states issuing the highest number of multifamily permits accounted for 63.1 percent of all multifamily permits issued nationwide. Over the first month of 2026, California, which issued the most multifamily permits, recorded a substantial increase of 119.2 percent. Texas, the second-highest state, posted a decline of 24.4 percent, while New York, ranking third, saw multifamily permits rise by 66.7 percent.

At the local level, the following are the ten metropolitan areas with the highest number of single-family permits issued.

Below are the ten metropolitan areas with the highest levels of multifamily permitting activity.



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


Residential building material prices rose at a slower rate in January, according to the latest Producer Price Index release from the Bureau of Labor Statistics. This was the first decline in the rate of price growth since April of last year. Metal products continue to experience price increases, while specific wood products are showing declines in prices.

The Producer Price Index for final demand increased 0.5% in January, after rising 0.4% in December. The January increase in final demand is linked directly to final demand services, which saw prices rise 0.8% in January. The index for final demand goods decreased 0.3% in January.

The price index for inputs to new residential construction rose 0.7% in January and was up 3.3% from last year. The price of goods used in new residential construction was up 0.9% over the month and 2.4% from last year. Meanwhile, the price for services was up 0.3% over the month and up 4.7% from last year.

Input Goods

The goods component has a larger importance to the inputs to residential construction price index, representing around 60%. On a monthly basis, the price of input goods to new residential construction was up 0.9% in January.

The input goods to residential construction index can be further broken down into two separate components, one measuring energy inputs with the other measuring remaining goods. The latter of these two components simply represents building materials used in residential construction, which makes up around 93% of the goods index.

Energy input prices fell 0.9% in January and were 10.3% lower than one year ago. Building material prices were up 1.0% in January and up 3.3% compared to one year ago, marking the lowest year-over-year price change since July of last year.

The largest year-over-year price increases continue to show in metal products. Topping the list in January was metal molding and trim, with prices up 48.3% from last year. One product that has seen rapid price growth acceleration over the past few months has been nonferrous metal and cable with prices up 19.7%. Price declines for materials over the year are concentrated among wood products with prices for particleboard and fiberboard down 24.4%, treated wood products down 5.0%, and softwood lumber down 3.3%.

Input Services

Prices for service inputs to residential construction reported an increase of 0.3% in January. On a year-over-year basis, service input prices were up 4.7%. The price index for service inputs to residential construction can be broken out into three separate components: a trade services component, a transportation and warehousing services component, and a services excluding trade, transportation, and warehousing component (other services).

The most significant component is trade services (around 60%), followed by other services (around 29%), and finally transportation and warehousing services (around 11%). The largest component, trade services, was up 7.1% from a year ago. The transportation and warehousing services rose 2.0%, while prices for other services were up 1.1% over the year.

Expanded Inputs to New Construction

Within the PPI that BLS publishes, new experimental data was recently published regarding inputs to new construction. The data expands existing inputs to industry indexes by incorporating import prices with prices for domestically produced goods and services. With this additional data, users can track how industry input costs are changing among domestically produced products and imported products. This data focuses on new construction, but the complete dataset includes indices across numerous industries that can be found here on BLS website. 

New construction input prices are primarily influenced by domestically produced goods and services, with domestic products accounting for 90% of the weight of the industry index for new construction. Imported goods make up the remaining 10% of the index.  

The latest available data, for November 2025, showed that domestically produced goods continue to have faster price growth compared to imported goods used in new construction. On a year-over-year basis, the index for domestic goods increased 3.0%, while prices for imported goods have fallen 3.0%.



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



“After” photos by Avery Nicole Photography

Kitchen at a Glance
Who lives here: An empty-nest couple
Location: Martindale, Texas
Size: 250 square feet (23 square meters)
Designer: Amanda Buckley of Bauley Interiors
Cabinetmaker: Kleighton Westphall of Monarch Woodworks of Austin
Builder: Blanco River Construction

Before: Gray walls, short white cabinets and laminate counters gave the former kitchen a flat, utilitarian feel. Shallow upper cabinets flanking the sink window on the left offered little storage and blocked natural light. Ceilings in the small house were less than 8 feet high, Buckley says. “The window wasn’t that big and there wasn’t enough lighting overall. They also had a vinyl-style tile above the sink but that was their only backsplash.”

A long, narrow island with stools felt especially tight, squeezed by reach-in closets along the right wall. “That essentially was their pantry,” Buckley says. “Their small appliances and pots and pans were stacked up on each other in there.” A retro-style red refrigerator sat out in the open with no clear role, while the primary stainless steel refrigerator was tucked into the far back left corner. “The red refrigerator was sort of just there,” Buckley says. “They liked the look of it but didn’t use it much.”



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


Mortgage application activity rose sharply in January, driven primarily by a surge in refinancing activity as mortgage rates declined to a new low. The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, increased 12.9% from December on a seasonally adjusted basis and was 61.3% higher than a year earlier.

The average contract interest rate for 30-year fixed mortgages dropped 13 basis points (bps) to 6.2% following the announcement of $200 billion in mortgage-backed securities (MBS) buybacks by the GSEs. Compared with January 2025, the 30-year fixed mortgage rate was 81 bps lower. The decline in rates supported month-over-month gains in both purchase and refinance activity. Purchase applications increased 2.9%, while refinance applications surged 19.8%. Relative to January 2025, purchase activity increased 16.2%, while refinance applications jumped 143.8%.

By loan type, applications for fixed-rate mortgages (FRMs) and adjustable-rate mortgages (ARMs) increased 12.9% and 7.9% month-over-month, respectively. On a year-over-year basis, FRM applications were up 57.8%, while ARM applications more than doubled, rising 113.1%. As of January 2026, ARMs accounted for an average of 7.1% of total applications on a non-seasonally adjusted basis, down 0.4 percentage points from December but 1.7 percentage points higher than a year earlier.

For loan sizes, the average loan amount across the total market increased by 1.1% to $402,000. Average purchase loan sizes increased 2.5% to $435,400, while the refinance loan size increased modestly by 0.2% to $378,000. In contrast, the average ARM loan size continued to decline, falling 4.4% to $925,600.



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


Builder confidence moved lower to start the year as affordability concerns continue to weigh heavily with buyers, and builders continue to contend with rising construction costs.

Builder confidence in the market for newly built single-family homes fell two points to 37 in January, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI).

While the upper end of the housing market is holding steady, affordability conditions are taking a toll on the lower and mid-range sectors. Buyers are concerned about high home prices and mortgage rates, with downpayments particularly challenging given elevated price to income ratios.

In a positive development, Freddie Mac reported that the average mortgage rate fell to 6.06% as of Jan. 15, the lowest rate in three years and nearly 100 basis points below the same period last year.

Most responses to the January HMI survey were received prior to the announcement that Fannie Mae and Freddie Mac would be purchasing $200 billion in mortgage-backed securities in an effort to bring down mortgage interest rates. And while this latest policy action on the interest rate front was largely not factored in the HMI survey, builders continue to report several supply-side headwinds. 

The future sales component of the HMI dipped below 50 for the first time since September, indicating that builders continue to face several issues that include labor and lot shortages as well as elevated regulatory and material costs.

In a further sign of ongoing challenges for the housing market, the latest HMI survey also revealed that 40% of builders reported cutting prices in January, unchanged from December but the third consecutive month the share has been at 40% or higher since May 2020. Meanwhile, the average price reduction was 6% in January, up from the 5% rate in December. The use of sales incentives was 65% in January, marking the 10th consecutive month this share has exceeded 60%.

Derived from a monthly survey that NAHB has been conducting for more than 40 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 of the HMI subindices fell in January. The HMI index gauging current sales conditions declined one point to 41 and the gauge charting traffic of prospective buyers dropped three points to 23. The index measuring future sales fell three points to 49, marking the first time this component fell below the breakeven point of 50 since September.

Looking at the three-month moving averages for regional HMI scores, the Northeast fell two points to 45, the Midwest held steady at 43, the South dropped one point to 35 and the West gained one point to 35.

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



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



Get Your Better Half Involved

For many couples there’s often one person who’s more interested in decorating than the other. The other person might say, “Do whatever you want.”

Do not do whatever you want. Because as soon as you start buying things, Mr. or Ms. No Opinion will suddenly have an opinion. So make him or her spend some time with you at the very beginning just looking at pictures of interiors. “Spend an hour or two on the computer and look at some things together and talk about them,” says interior designer Alana Homesley of Woodland Hills, California. As you review each room, ask your partner, “What do you like about it? What don’t you like about it?”

Alternatively, you can each collect images independently, then sit down and compare what you’ve chosen. This way your initial selections won’t be swayed by the other person. As you review your selections together, your differences and similarities will immediately become apparent.



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


The market value of household real estate assets fell from $48.1 trillion to $47.9 trillion in the first quarter of 2025, according to the most recent release of U.S. Federal Reserve Z.1 Financial Accounts. The value of household real estate assets declined for three consecutive quarters after peaking at $48.8 trillion in the second quarter of 2024 but remains 2.1% higher over the year.

Real estate secured liabilities of households’ balance sheets, i.e. mortgages, home equity loans, and HELOCs, increased 0.3% over the first quarter to $13.4 trillion. This level is 2.9% higher compared to the first quarter of 2024.

Owners’ equity share of real estate assets was 72.0% in the first quarter, marking a small decline in owners’ equity share which matches the decline in the market value of households real estate assets. The share in the first quarter of 2024 was 72.2%.

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


Housing’s share of the economy grew to 16.4% in the first quarter of 2025, according to the advance estimate of GDP produced by the Bureau of Economic Analysis. This is the highest reading since the third quarter of 2022 and is up 0.2 percentage points from the fourth quarter of 2024.

The more cyclical home building and remodeling component – residential fixed investment (RFI) – was 4.1% of GDP, up from 4.0% in the previous quarter. The second component – housing services – was 12.3% of GDP, up from 12.2% in the previous quarter. The graph below stacks the nominal shares for housing services and RFI, resulting in housing’s total share of the economy.

Housing service growth is much less volatile when compared to RFI due to the cyclical nature of RFI. Historically, RFI has averaged roughly 5% of GDP, while housing services have averaged between 12% and 13%, for a combined 17% to 18% of GDP. These shares tend to vary over the business cycle. However, the housing share of GDP lagged during the post-Great Recession period due to underbuilding, particularly for the single-family sector.

In the first quarter, RFI added 5 basis points to the headline GDP growth rate, marking the second straight quarter of positive contributions. RFI was 4.1% of the economy, recording a $1.216 trillion seasonally adjusted annual pace. Among the two segments of RFI, residential structures rose 1.2% while residential equipment rose 5.5%.

Breaking down the components of residential structures, single-family structure RFI grew 5.9%, while multifamily investment fell 11.5%. RFI for multifamily structures has contracted for seven consecutive quarters. Permanent site structure RFI, which is made up of single-family and multifamily RFI, grew 1.2%.  Other structures RFI rose 0.6% in the first quarter, down from 11.4% the previous period.

The second impact of housing on GDP is the measure of housing services. Similar to the RFI, housing services consumption can be broken out into two components. The first component, housing, includes gross rents paid by renters, owners’ imputed rent (an estimate of how much it would cost to rent owner-occupied units), rental value of farm dwellings, and group housing. The inclusion of owners’ imputed rent is necessary from a national income accounting approach, because without this measure, increases in homeownership would result in declines in GDP. The second component, household utilities, is composed of consumption expenditures on water supply, sanitation, electricity, and gas.

For the first quarter, housing services represented 12.4% of the economy or $3.691 trillion on a seasonally adjusted annual basis. Housing services expenditures grew 3.4% at an annual rate in the first quarter and contributed 41 basis points to GDP growth. Real personal consumption expenditures for housing grew 1.3%, while household utilities expenditures grew 18.7%. Real personal expenditures for natural gas services grew 53.1% in the first quarter, as residential consumption of natural gas recorded its highest monthly level since January 2014, at 1.035 trillion cubic feet in January 2025. Through the first two months of 2025, residential households consumed 1.833 trillion cubic feet of natural gas, higher than the 1.582 trillion in 2024 and 1.498 trillion in 2023.

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

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