Everyone knows that affordability is the defining challenge of this housing market. I talk about it constantly with my builder colleagues in the context of land, labor, materials, interest rates, insurance, and permitting timelines. All of those things matter.
But the flip side of the affordability conversation includes the products, systems, and technologies that require no zoning reforms, no rate cuts, and no acts of Congress, yet can dramatically reduce the cost of owning a home on an ongoing basis.
Take, for example, heat pumps. In April, RMI published an analysis of a large and largely ignored slice of the housing stock: homes heated by electric resistance: baseboards, wall units, electric furnaces, and strip heat systems.
More than 25 million U.S. homes, roughly one in five, heat with electric resistance, and more than 57 million homes, nearly half of all American households, use electric resistance water heaters. According to RMI, a single-family electric resistance household that upgraded both space and water heating would achieve $1,530 a year in savings, on average, and nearly $23,000 over the fifteen-year life of the equipment.
If every single-family electric resistance home converted to heat pump technology, RMI projects more than $20 billion in annual savings nationally, with a decrease of 51 GW from winter residential peak demand and 11 GW from summer peak demand. Texas alone would capture close to $2 billion in savings, shedding 7.5 GW of winter peak—the equivalent of shuttering roughly twenty-five 300-megawatt gas plants. Furthermore, RMI projected a 40% reduction in carbon emissions from those households in year one, and 38 million metric tons annually at full conversion.
The performance attributes are undeniable: a cold-climate heat pump is 150% to 200% more efficient than electric resistance heating, delivering the same warmth on roughly half the electricity. Modern heat pumps can hold that advantage down to 5°F. On the cooling side, a new high-efficiency unit runs about 20% more efficient than an older air conditioner it replaces.
A Clear Shift in Perspective
COGNITION Smart Data has tracked builder sentiment on electrification technologies for years. For a long time, heat pumps had some fervent champions, but many builders, contractors, and sub-contractors were skeptical. However, a recent survey from July 2026 shows a decisive shift.
When we asked builders which technologies their clients would invest in to convert a home to all-electric, heat pump heating and cooling technologies topped the list at 68.5% (compared to just 41.1% in 2024.) Heat pump water heaters came in second at 65.8%, up from 31.0% in 2024, marking the sharpest increase of the technologies we track.
Beyond heat pumps, high-performance products and technologies of all kinds are experiencing broader adoption: In the recent COGNITION survey, builders reported greater interest in using high-performance insulation (85.5%), appliances (85.3%), smart thermostats (85.2%), windows and doors (83.8%), lighting (79.1%), and solar photovoltaics (75.7%). Two years ago most of those numbers were in the sixties and low seventies.
In today’s economy, efficiency is consumers’ go-to affordability lever: When we ask our consumer audience which feature matters most in a home designed to reduce long-term costs, energy efficiency is by far the top response. When asked whether they are more interested in reducing their energy load or controlling it, 76.3% chose load reduction.
All-electric is no longer a hard sell: 73.4% of consumers say they would buy an all-electric home; nearly 80% of consumers report a willingness to embrace heat pump HVAC and water heating technologies; and nearly 50% say that they would pay five percent or more for them.
The increase in willingness to adopt technologies like heat pumps is being driven by increased awareness as well as compelling economics. Equipment costs have decreased significantly as manufacturing scaled and the category matured. Cold-climate performance that carried a steep premium a few years ago is now reaching price-parity with conventional systems.
At the same time, utility bills have spiked in many markets around the country, driven by rising demand, grid investment, and weather volatility. Every dollar added to a monthly energy bill augments the ROI for efficient systems like heat pumps—when first costs fall and avoided costs rise simultaneously, the payback period shrinks.
Policy is aligning too. RMI’s report spotlights where the market is heading: energy codes that discourage electric resistance as a primary heat source, new construction incentives, heat pump conversion triggered at the moment of air conditioner replacement, and tariffed on-bill financing so the upgrade pays for itself out of the savings it creates.
Three Immediate Steps
Given the impact that this one upgrade can make for homeowners, there are three things worth doing now:
Make the heat pump a headline feature. Don’t bury it in the spec sheet. A heat pump system is one of the few upgrades where you can hand a buyer a specific annual number and a specific fifteen-year number. Use them: buyers who are told a home is efficient shrug; buyers who are shown what it saves do not.
Put the number in the buyer’s hand. The premium willingness already exists, what’s missing is the arithmetic that justifies it. Show the comparison against the system the buyer would otherwise get, monthly and over the life of the equipment.
Know the incentive landscape better than your buyers do. With 63% of consumers now capturing incentives, your sales team should know every rebate and credit available in your market cold. It is often the difference between a hesitation and a signature.
Twenty-five million American homes are heating themselves the most expensive way physics allows. The fix is proven, available, installable today, and pays for itself well inside the life of the equipment. It lowers bills, cuts peak load, improves comfort and air quality, and reduces carbon, all at once, which is rare enough that it should be at the top of every list in this industry.
The old objections have run out. The equipment works in cold climates. The costs have come down. The incentives are flowing. Builders want it, consumers will buy it, and the savings are documented. Heat pumps for heating, cooling, and hot water are simply the intelligent, cost-effective choice for the builder specifying the system and for the family who will pay the bills.
Ready to Get Smarter?
The data in this article comes from COGNITION Smart Data, Green Builder Media’s proprietary market intelligence platform. COGNITION tracks what buyers actually want, what they will pay for, and where demand is forming — so you can build and sell against the market that is coming, not the one that just left. Subscribe to COGNITION Smart Data today.