In December, a panel of 2,885 home builders was asked by the National Association of Home Builders (NAHB) about the long-term impacts they expect from 14 trends on the health of the home building industry and housing demand.
The results were largely pessimistic. Of the 420 respondents to the NAHB/Wells Fargo Housing Market Index (HMI), findings unveiled Thursday showed a majority expect more of these forces to have “somewhat to strong negative impacts“ on the industry than “somewhat to strong positive impacts.”
Five of the trends were evaluated as negative long-term risks by more than half of the builders:
- Government debt levels: 82%
- Declining fertility rate: 78%
- Long-term inflation outlook: 70%
- Declining marriage rate: 67%
- Energy costs: 61%
Two other forces were seen by many respondents to hold long-term negative consequences for the industry, with 44% citing “evolving income and wealth distribution” and 41% citing “aging population.”
Only three of the 14 trends were seen as positive by more than half of the respondents for the future of the home building industry: aging housing stock, work-from-home policies and artificial intelligence, with 73%, 65% and 52% positive response rates, respectively.
“Builders are clearly thinking beyond the short-term outlook and are focusing on the forces that will shape housing demand for years to come,” commented Robert Dietz, NAHB’s chief economist, in a statement analyzing the results. “While long-term demographic trends and fiscal pressures are viewed as headwinds, builders also see meaningful opportunities tied to an aging housing stock, evolving work patterns and emerging technologies that can offer growth opportunities and improve productivity and affordability.”
Three of the trends were seen as having no impact on the long-term health of the industry by more than 70% of builders: driverless cars, cryptocurrency and climate change.
“These findings underscore the complex outlook facing the housing market, as builders weigh the long-term risks alongside opportunities for innovation and adaptation in response to shifting consumer needs,” said Jason Orvosh, chair of NAHB’s Young Professionals Committee. “Especially for those builders at the early stages of their careers, these factors will shape the market for years to come and offer insights into the future of the housing market.”
NAHB also released data Thursday showing that “while new and existing homes remain largely unaffordable, the needle moved slightly in the right direction in the second half of 2025.”
Its data came from the NAHB/Wells Fargo Cost of Housing Index (CHI) report, which stated in the fourth quarter of 2025, “A family earning the nation’s median income of $104,200 needed 34% of its income to cover the mortgage payment on a median-priced new home. Low-income families, defined as those earning only 50% of median income, would have to spend 67% of their earnings to pay for the same new home.”
The CHI data, which was delayed due to last fall’s federal government shutdown, indicates what NAHB describes as a slight improvement in affordability. In the last three quarters of 2025, the income share needed to buy a new home declined from 36% in the second quarter to 35% in the third quarter and 34% in the final quarter of 2025.
