2025 Forum for Housing Executives Summary
On March 11, Builder Advisor Group and Avila Real Estate Capital ("AREC") hosted its 12th annual Forum for Housing Executives which brought together nearly 100 of the nation’s top builders and developers to discuss the housing market outlook for 2025, global macroeconomic trends, land development, capital markets, and more. The Forum included builders that represent more than half of all new single-family home deliveries.
Highlights and Key Takeaways
- M&A: Will remain robust! We anticipate about ten private builder sales in the next six months along with one public builder sale announcement
- Tariffs: We don’t anticipate much impact on builder margins from tariffs
- Labor: We anticipate that the labor supply will remain strong. We don’t anticipate labor costs to rise
- Immigration Policy: We don’t anticipate deportations nor immigration constraints to have a material impact on demand nor on the labor supply
- Affordability and Consumer Confidence: These issues remain major challenges for builders. Sales may be slowed by increasing consumer debt, worries about the economy, and potential for job loss
- Housing Demand Stratified by price point, geography, and product type: Builders in the room stated that entry level is slower than move up/move down, luxury, and active adult. Also, areas that have less new homes built in recent years are stronger (for example Chicago, Philadelphia, and New Jersey are seeing better demand than parts of Florida and Texas)
- Government Layoffs: Anticipate unemployment to trend to 5% by the end of 2025 with slackening demand for new homes due to 300,000 government layoffs and as many as 600,000 contractors
- Interest Rates: Anticipate 30 year mortgage rates to trend towards 6% by the end of 2025 with two Fed Funds cuts anticipated in the latter half of 2025
- Builder Performance: Anticipates more rate buy downs and forward commitments to spur sales pace
- Artificial Intelligence: Anticipate AI to be adopted more rapidly. Adapt or be left behind
- AREC has originated more than $900M in A&D loans since 2022 and anticipates further A&D and vertical lending activity in 2025 and beyond as loans from traditional banking sources remain tight
- Pacific InterWest provides course of construction inspections, HERS ratings, apartment balcony and construction inspections and is now part of AREC and Builder Advisor Group
