By Ashok Chaluvadi | National Association of Home Builders
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.
