Builders Foresee ‘Tough Slog’ In Next Admin's Housing Promises

Homebuilding strategists we listen to expect "a tough slog" ahead.

Given current challenges, uncertainties, and volatile business dynamics, they're looking at the puts and takes of an incoming new Presidential Administration with a weather eye.

Here's the scope of the challenge:

For the first time since we began measuring housing underproduction in 2012, the gap between the housing we have and the housing we need narrowed, moving from 3.89 to 3.85 million."

Problem is, for other than a few economists and statisticians, that's too abstract for many of us to feel its importance.

After all, the United States comprises approximately 3,143 counties and county equivalents, over 19,000 incorporated cities, towns, and villages, and numerous unincorporated communities such as hamlets. Despite this vast array of locales, a common crisis unites them: a significant shortage of housing to meet the needs of their residents.

That's felt. It's a source of pain at the family, individual, and community levels, daily, weekly, and monthly.

The proposals and promises took dead aim at that pain, and now its reality-based plans and actions will have their moment to become clear and take effect.

At the same time, the homebuilding industry has consistently demonstrated resilience and adaptability, even under the worst conditions. Through various policy shifts and economic fluctuations, builders have navigated challenges and seized opportunities, underscoring their pivotal role in America's economic and social fabric. As the nation confronts the current housing deficit, this enduring spirit of innovation and determination positions the industry to address the pressing demand for homes in the months ahead.

To navigate the months leading up to January 2025 and prepare for a market shaped by potentially radical new policies and floated initiatives, homebuilding leaders must emphasize the qualities that define their industry: resilience, agility, and a long-term perspective.

Deregulation, deportation, de-designation of public lands, historically hefty international tariffs, taxation, and, you-name-it have been promised as "on the table" in the spirit of addressing an ever-larger frustrated and disenfranchised populace seeking relief from insane housing costs.

Homebuilders, we have written, are essential to any realistic solution.

Here’s a playbook of 10 core strategies for positioning for stability, managing risk, and pursuing opportunity in the evolving housing landscape.

Anticipate Policy Shifts: Keep Cost Optionality in Mind

Homebuilders should brace for potential regulatory shifts — some of which may ease while others may intensify under Trump’s administration. Builders should consider multiple scenarios, including potential deregulation alongside tariffs on materials that could raise costs. Building flexibility into cost structures will allow homebuilders to adapt as policies materialize.

Secure Workforce Stability In Light Of Front-line Labor Risk

A proposed mass deportation of undocumented immigrants could disrupt the labor force in critical regions. To mitigate this risk, builders should strengthen local workforce pipelines by investing in recruitment and training partnerships. Maintaining a steady workforce amid shifting immigration policies can safeguard against potential labor shortages and continue meeting construction demands.

Prioritize Affordable Inventory to Meet Unmet Demand

With the housing supply strained and demand steady, having inventory across various price points is a critical differentiator. This involves balancing current building costs with anticipated affordability policies, allowing builders to stay competitive and meet pent-up demand from prospective buyers awaiting lower interest rates.

Trump’s pro-housing stance may open up tax incentives for affordable housing production. Homebuilders who emphasize products that meet affordability needs, while also aligning with demographic shifts among Millennials and Gen Z buyers, will be well-positioned to capture market share. A clear focus on affordable, attached, higher-density, smaller square footage, and value-driven offerings continues to be a critical opportunity area.

Targeted Marketing to Address Buyer Hesitation

With buyer sentiment in flux, strategic leaders should leverage data-driven marketing to align offerings with specific buyer motivations. Homebuyers are looking for stability, affordability, and flexibility. Understanding these needs and tailoring incentives like buyer-specific data discovery, rate buy-downs, or closing cost assistance for specific demographics and granular prospect feedback loops will help accelerate conversions.

Invest In Lean Operations To Offset Rising Material Costs

If tariffs raise the costs of imported goods, builders must counterbalance through streamlined operations. Adopting automation, lean construction techniques, and advanced material sourcing — including warehousing stores of essential, globally sourced materials and products — can mitigate cost impacts, positioning builders to maintain profitability even as material prices fluctuate.

Secure Financial Stability Amid Potential Rate Changes

The Fed’s recent rate cuts — including today's 25–basis–point cut — may offer temporary relief, but an inflation spike could reverse this trend. Homebuilders should shore up their financial resilience by securing flexible financing terms, maintaining liquidity, and exploring innovative capital partnerships to buffer against future rate changes and support continued growth.

Strategic Land Plays: Keep Long-Term Stability in Mind

Land acquisition remains a key element for homebuilders, and stability in this area is paramount. Builders should prioritize land purchases in high-demand regions, especially where demographic trends show long-term growth. Leveraging potential landbank partnerships – and sleuthing out tracts that could potentially move from public land to developable parcels – for land access may offer builders new opportunities to secure strategic locations at favorable terms.

Embrace Community-Driven Development

Both public and private support for affordable housing has grown, and homebuilders that emphasize sustainable, community-focused developments can leverage these incentives. Planning for resilient communities incorporating mixed-use spaces and green features aligns with consumer preferences and potential policy support, driving immediate value and long-term sustainability.

Build a Leadership Team That Can Pivot and Perform

Homebuilders need versatile leadership equipped with skills in economics, risk management, technology, and market strategy to navigate shifting policies. Building a leadership team capable of swift, data-informed decisions will enable companies to adapt to changes and pursue new opportunities. Homebuilders who prioritize leadership resilience will be best positioned to overcome obstacles and drive growth in the face of evolving conditions.

As the homebuilding industry enters a new era with a history of resilience and grit, the road ahead presents challenges — some familiar, some new. Homebuilding’s culture of capability has repeatedly shown that it can weather policy shifts, economic cycles, and market uncertainties.

With a clear focus on flexibility, efficiency, and targeted growth, homebuilders can turn these challenges into opportunities to continue building the places where Americans live, work, and dream. Through strategic adaptability and an unwavering commitment to serve, the industry stands ready to shape the housing landscape and strengthen its role as an economic and societal cornerstone of America.