Searching for your dream home in the 2025 market looks very different! Mortgage rates are remarkably different from years past, as everyone seems to wait for the “perfect time” to buy. The latest data from the National Association of Home Builders (NAHB) reveals that now is actually a good time to find your next home. NAHB’s Jesse Wade briefed Builder 20 Club members on the latest economic outlook.
The key message? While the economy is full of uncertainty, opportunity still exists, especially for private builders (such as Traton Homes) who are paying close attention.
Here are the takeaways:
- The Economy Is Slowing, But Not Stalling: GDP growth is forecasted to dip to just over 1% this year, down from nearly 3% in 2023. While there’s a 30% chance of a recession, job growth remains positive, and unemployment remains low. In short, things have cooled, but we’re not in a freeze.
- Rates Are Dropping… Slowly: After a steep climb in 2022–2023, the Fed finally started cutting rates at the end of 2024. More cuts are expected through 2026. That’s good news for long-term affordability—but don’t expect mortgage rates to drop below 6% anytime soon. The market is still pricing in risk.
- Housing Costs Are Driving Inflation: Shelter inflation is one of the most significant factors keeping overall inflation elevated. There’s only one real fix: more housing supply. That puts builders in a position of long-term strength—if we can navigate the short-term challenges.
- Land and Labor Shortages Are Still Real: The most prominent issues builders expect to face in 2025:
- Cost and availability of developed home sites
- Skilled labor shortages
- Higher material and insurance costs
- Regulatory headaches (zoning, environmental rules, fees)
Nearly two-thirds of builders say they face land shortages, making land control and entitlement expertise more crucial than ever.
- Construction Lending Is Easing: Acquisition, Development and Construction (AD&C) lending conditions are improving slightly after a tough couple of years. Interest rates on land and construction loans ticked down in Q1 2025. This could help with the feasibility of tougher deals.
- Townhomes and Build-for-Rent Are Holding Ground: Townhome construction continues to rise, accounting for nearly one in five new single-family starts. Build-for-rent homes remain a meaningful share of new construction, though momentum has slowed with higher financing costs.
- Builder Confidence Is Soft, But Stabilizing: The NAHB/Wells Fargo Housing Market Index (HMI) took a hit in May, dropping to levels we haven’t seen since late 2022. But forecasts call for modest improvement in starts over the next two years—flat in 2025, then ticking up 2% to 5% through 2027.
What This Means for Traton Homes
In a market where builders and buyers are “waiting for lower rates,” success will come from those who act instead of waiting. Our ability to:
- Control land positions
- Navigate regulation
- Keep the product efficient
- Market aggressively to qualified buyers
…will be what sets us apart.
Traton Homes will continue to monitor conditions closely, but as this NAHB presentation reminded us, the long-term fundamentals for housing remain strong. The challenge is execution.
Follow the blog and social media to stay updated on market changes and more in our Traton University series.
Start your homebuying journey on the right note. Traton Homes proudly offers new homes in metro Atlanta and the Florida panhandle. Visit the Find a Home page to browse quick delivery homes, new communities and ongoing promotions.
