7 Ways Things Are Looking Up For Builders

Builders reveal the state of the building industry. 

The 2024 State of Sustainable Building COGNITION survey reveals that builders are in a better position this year when compared to 2023. 

Overall, builders have a positive sentiment with respect to market conditions: While they recognize that home prices and mortgage rates remain high—fueling affordability concerns—they claim that low inventory, cooling inflation, a robust jobs market, and solid housing fundamentals give them confidence that the housing market will remain strong.

Builders also report that they are addressing affordability challenges by standardizing their options to streamline costs, buying down mortgage rates for homebuyers, and building smaller homes at lower price points in secondary and tertiary markets.

More than 75 percent of builder respondents feel optimistic about the long-term prospects of the housing market. Nearly 85 percent of them point to a solid construction backlog that they believe will carry them into 2025 and beyond. 

Here are other signs that the future is a brighter one for builders: 

Which is negatively impacting your business the most?

Improved outlook. Builders say that they’ve been less impacted in 2024 by material shortages, high material costs, high mortgage rates, and challenges accessing financing. Charts developed from COGNITION Smart Data.

Have inflation and high interest rates caused you to curb spending in any of the following areas in your business?

Money to spend. Respondents are also struggling less this year. In 2023, more than 40 percent of builders claimed that they had to cut back on sustainability upgrades. In 2024, that number plummeted to 10 percent.  Charts developed from COGNITION Smart Data.

How much have inflation and high interest rates caused you to cut back on monthly business spending?

Expenses Down. In 2023, most builders reported that they had to cut back on monthly business spending by 11-20 percent. In 2024, 40 percent said they didn't have to cut back at all. Charts developed from COGNITION Smart Data.

Do you think the economy is getting:

Optimism rules. Builders are generally feeling bullish about the economy. Approximately 60 percent believe things are getting better. Less than 10 percent believe conditions are worsening. Charts developed from COGNITION Smart Data.

Are your clients willing to pay more upfront for sustainability upgrades if they will lower the ongoing cost of homeownership over time?

Open to upgrades. Builders assert that their homebuyers are willing to pay for sustainability upgrades like energy efficiency, resiliency, healthy home, and electrification if they will lower the cost of homeownership. Charts developed from COGNITION Smart Data.

Are you seeing an increased demand for any of the following?

Efficiency first. Builders say buyers are asking for more products like energy efficient windows, doors, lighting, heat pumps, solar + storage systems, induction cooktops, and more. Charts developed from COGNITION Smart Data.

How has consumer demand changed in your market? Do buyers want:

Popular attributes. Builders report a year-over-year increase in demand for sustainability features like energy efficiency, healthy homes, resiliency, and electrification. Charts developed from COGNITION Smart Data.