While the home building industry was rocked in 2025, there are some practices that can help builders weather ups and downs.
2025 was a tumultuous year. Between tariffs, interest rates, the loss of tax credits/incentives, unemployment and inflation, it was a wild ride for homebuyers and the homebuilding industry. Unfortunately, the proverbial roller coaster doesn’t know what a calendar is, so this isn’t magically going away just because we enter a new year.
The recent 0.25% interest rate cut might help a little, and there is a chance the rate might get lowered one more time in 2026. However, the Fed has to balance inflation and unemployment. As Fed Chairman Powell said, “We can’t do two things at once,” so they will continue to walk the line between boosting the economy while also not overheating it.
On top of all that, there are utility rate increases coming soon for millions of people. For instance, in Arizona and Indiana, rate hikes are estimated to cost ratepayers an additional $20 and $20-30 per month, respectively. Affordability, which was already an issue, isn’t going away anytime soon.
One thing that has stood the test of time: value engineering.
We talk about this a lot in Housing 2.0, but there are numerous choices that can affect the price of a home. The price ranges of those choices can span from $0 to tens of thousands of dollars. Whatever your budget is, there are decisions you can make to reduce the overall price of a home. Here are three worth highlighting:
1. Think Through Home Design First
The easiest, in my opinion, is in the design phase. Before a speck of dirt gets moved or a single material arrives onsite, thinking through all the facets of the home and how they can work in harmony with each other is a great way to save money. It can lower both your upfront and operational costs. Astute design can also add a lot of value to your home, which can be realized when the home is sold.
2. Pick Home Upgrades Strategically
Making the strategic choice to upgrade certain components of your home is another smart move. Often, these decisions are driven primarily by ROI, but don’t overlook the fact that … you’re going to be living there!
Do you really want to make the most spartan selections for every single feature of your newly built home? Probably not.
3. Ask for Help
Finally, there is another option, though it is often the most difficult for most people: asking for help. In this day and age, it’s easy for people to just search on the internet or watch some random video for advice. People can feel embarrassed or ashamed that they don’t know “all the right answers.”
As we’ve mentioned a few times in Housing 2.0, hiring an expert can make a big difference. It can save you from making bad decisions that you’ll later regret (or have to change), it can lower your stress levels (which has a tangible benefit) in what is already a stressful situation, and it can also help you make more cost-effective decisions that can save you money.
It's not been an easy year for those with sustainability at the forefront of their decision-making processes. Despite all the noise and headwinds, there are still choices you can make to make your project, and our world, a better place.
Mike Collignon, author of our Code Watch and Housing 2.0 Program Manager, is Executive Director and Co-Founder of the Green Builder Coalition, a not-for-profit association dedicated to amplifying the voice of green builders and professionals to drive advocacy and education for more sustainable homebuilding practices.
Year-End Reflections
While the home building industry was rocked in 2025, there are some practices that can help builders weather ups and downs.
2025 was a tumultuous year. Between tariffs, interest rates, the loss of tax credits/incentives, unemployment and inflation, it was a wild ride for homebuyers and the homebuilding industry. Unfortunately, the proverbial roller coaster doesn’t know what a calendar is, so this isn’t magically going away just because we enter a new year.
The recent 0.25% interest rate cut might help a little, and there is a chance the rate might get lowered one more time in 2026. However, the Fed has to balance inflation and unemployment. As Fed Chairman Powell said, “We can’t do two things at once,” so they will continue to walk the line between boosting the economy while also not overheating it.
On top of all that, there are utility rate increases coming soon for millions of people. For instance, in Arizona and Indiana, rate hikes are estimated to cost ratepayers an additional $20 and $20-30 per month, respectively. Affordability, which was already an issue, isn’t going away anytime soon.
One thing that has stood the test of time: value engineering.
We talk about this a lot in Housing 2.0, but there are numerous choices that can affect the price of a home. The price ranges of those choices can span from $0 to tens of thousands of dollars. Whatever your budget is, there are decisions you can make to reduce the overall price of a home. Here are three worth highlighting:
1. Think Through Home Design First
The easiest, in my opinion, is in the design phase. Before a speck of dirt gets moved or a single material arrives onsite, thinking through all the facets of the home and how they can work in harmony with each other is a great way to save money. It can lower both your upfront and operational costs. Astute design can also add a lot of value to your home, which can be realized when the home is sold.
2. Pick Home Upgrades Strategically
Making the strategic choice to upgrade certain components of your home is another smart move. Often, these decisions are driven primarily by ROI, but don’t overlook the fact that … you’re going to be living there!
Do you really want to make the most spartan selections for every single feature of your newly built home? Probably not.
3. Ask for Help
Finally, there is another option, though it is often the most difficult for most people: asking for help. In this day and age, it’s easy for people to just search on the internet or watch some random video for advice. People can feel embarrassed or ashamed that they don’t know “all the right answers.”
As we’ve mentioned a few times in Housing 2.0, hiring an expert can make a big difference. It can save you from making bad decisions that you’ll later regret (or have to change), it can lower your stress levels (which has a tangible benefit) in what is already a stressful situation, and it can also help you make more cost-effective decisions that can save you money.
It's not been an easy year for those with sustainability at the forefront of their decision-making processes. Despite all the noise and headwinds, there are still choices you can make to make your project, and our world, a better place.
By Mike Collignon
Mike Collignon, author of our Code Watch and Housing 2.0 Program Manager, is Executive Director and Co-Founder of the Green Builder Coalition, a not-for-profit association dedicated to amplifying the voice of green builders and professionals to drive advocacy and education for more sustainable homebuilding practices.Also Read