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Residential Construction Market in the US to Grow by USD 242.9 Million (2025-2029), Driven by Rising Household Formation, Report Highlights AI-Redefined Landscape - Technavio


NEW YORK, Jan. 22, 2025 /PRNewswire/ -- Report with market evolution powered by AI - The residential construction market in US size is estimated to grow by USD 242.9 million from 2025-2029, according to Technavio. The market is estimated to grow at a CAGR of 4.5% during the forecast period. Increasing household formation rates is driving market growth, with a trend towards rising focus on sustainability in residential construction projects. However, skilled labor shortages for large-scale residential real estate projects poses a challenge. Key market players include Alliance Residential Co., ATCO Ltd, BEAZER HOMES USA INC., D. R. Hortons Inc., DRB Homes., Greystar Worldwide LLC, Hensel Phelps, HOCHTIEF AG, Hovnanian Enterprises, KAUFMAN and BROAD, Kiewit Corp., Lennar Corp., MI Homes Inc., Meritage Homes Corp., Mill Creek Residential, NVR Inc., and Pultegroup Inc..

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Forecast period

2025-2029

Base Year

2024

Historic Data

2019 - 2022

Segment Covered

Product (Apartments and condominiums, Villas, and Other types), Type (New construction and Renovation), Application (Single family and Multi-family), and Geography (North America)

Region Covered

US

Key companies profiled

Alliance Residential Co., ATCO Ltd, BEAZER HOMES USA INC., D. R. Hortons Inc., DRB Homes., Greystar Worldwide LLC, Hensel Phelps, HOCHTIEF AG, Hovnanian Enterprises, KAUFMAN and BROAD, Kiewit Corp., Lennar Corp., MI Homes Inc., Meritage Homes Corp., Mill Creek Residential, NVR Inc., and Pultegroup Inc.

Key Market Trends Fueling Growth

The US residential construction market is experiencing a notable trend towards affordable housing. The Federal Reserve's federal funds rate and mortgage rates influence home buying decisions. Housing supply remains a concern due to the economy's state and residential investment. The labor market, inflation, and interest rates are key factors shaping the industry. Recession fears linger, but construction sectors continue spending in nominal terms. Cancelation rates for housing starts and building permits are impacted by various factors including epidemic-related disruptions, millennials' purchasing power, and savings from previous generations. Fair housing programs and HUD initiatives aim to improve living circumstances for individuals and younger generations. Mexico's housing market and real estate in Canada also influence US trends, with Canadian home buyers and mortgage rates affecting demand. Inflation rates, borrowing, and lending guidelines impact home construction activity. Vaccination rates and labor economy recovery are crucial for a post-pandemic recovery. The residential sector, including single-family homes and new homes, is a significant contributor to the economy. Home buyers face challenges with mortgage stress tests, credit score requirements, and debt service caps. Affordability remains a concern, with fixed-mortgage rates and asset values affecting eligibility. Remote employment and migrant movements impact housing demand. The non-residential sector also influences the industry through borrowing rates and home supplies. 

The residential construction market in the US is witnessing a significant shift towards sustainability. Homeowners are increasingly demanding energy-efficient and eco-friendly homes, leading to the adoption of green building practices and technologies. Solar panels, energy-efficient insulation, and sustainable building materials are gaining popularity. Government initiatives, including tax credits and rebates, are also promoting sustainability in residential construction. This trend is driven by growing awareness of the environmental impact of traditional construction methods and the desire to reduce carbon footprints. 

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Market Challenges

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Segment Overview 

This residential construction market in US report extensively covers market segmentation by

  1. Product 
    • 1.1 Apartments and condominiums
    • 1.2 Villas
    • 1.3 Other types
  2. Type 
    • 2.1 New construction
    • 2.2 Renovation
  3. Application 
    • 3.1 Single family
    • 3.2 Multi-family
  4. Geography 
    • 4.1 North America

1.1 Apartments and condominiums- The residential construction market in the US is witnessing significant growth, driven by the increasing demand for apartments and condominiums. While both types of properties share a multi-unit nature, they differ in ownership structure. Apartments are usually owned by a single entity, often a property management company, and condominiums consist of individually owned units within a larger complex. This segment's growth is fueled by the trend towards urbanization, as more people prefer the convenience and amenities of city living. Developers are responding by constructing modern, sustainable, and community-focused living spaces, such as the Hudson Yards development in New York City, which offers a mix of residential and commercial spaces, including luxury condominiums and apartments. In tech-driven cities like San Francisco and Seattle, developers cater to young professionals by constructing condominiums with smart home features, communal workspaces, and recreational facilities. These factors contribute to the growth of the residential construction market in the US during the forecast period.

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Research Analysis

The residential construction market in the US is currently experiencing a trend towards affordable housing, with a focus on providing more accessible and affordable options for home buyers. The Federal Funds rate and mortgage rates have a significant impact on the market, with higher rates making it more expensive for home buyers to secure financing. Housing supply remains a concern, with a shortage of new homes being built due to labor market challenges and inflationary pressures. The Federal Reserve's interest rate decisions also play a role in the market, with higher rates potentially leading to a recession. Construction spending in the residential sector has seen double-digit growth in some areas, but cancellation rates for new housing starts and building permits remain high. Single-family homes continue to be in high demand, with new home sales remaining strong. Government programs, such as Housing Choice Vouchers, Fair Housing programs, and HUD initiatives, are working to address housing affordability and ensure equal access to housing opportunities.

Market Research Overview

The residential construction market in the US is currently experiencing a trend towards affordable housing, driven by increasing demand from millennials and other younger generations. The Federal Reserve's federal funds rate and mortgage rates have a significant impact on the market, with higher rates making it more difficult for home buyers to afford new homes. The housing supply remains a concern, with industry spending on home construction activity and building permits for single-family homes and new homes lagging behind demand. The economy, labor market, and inflation also play crucial roles. A potential recession could impact the market, as could cancelation rates and epidemics. The construction sectors, including residential and non-residential, are affected by various factors, including borrowing rates, home construction activity, and purchasing frenzies. The real estate market, including single-family home sales and median prices, is influenced by factors such as savings, previous generations' asset values, and regulations. The Canadian market, with its home buyers and mortgage rates, also impacts the US market. Vaccination rates, labor economy, and social catastrophes are additional factors to consider. Affordability remains a significant concern, with borrowing rates, bond yields, lending guidelines, mortgage insurance, credit score requirements, and debt service caps all impacting eligibility for mortgages. The housing market is interconnected with various economic indicators, making it a complex and dynamic industry.

Table of Contents:

1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation

7 Customer Landscape
8 Geographic Landscape
9 Drivers, Challenges, and Trends
10 Company Landscape
11 Company Analysis
12 Appendix

About Technavio

Technavio is a leading global technology research and advisory company. Their research and analysis focuses on emerging market trends and provides actionable insights to help businesses identify market opportunities and develop effective strategies to optimize their market positions.

With over 500 specialized analysts, Technavio's report library consists of more than 17,000 reports and counting, covering 800 technologies, spanning across 50 countries. Their client base consists of enterprises of all sizes, including more than 100 Fortune 500 companies. This growing client base relies on Technavio's comprehensive coverage, extensive research, and actionable market insights to identify opportunities in existing and potential markets and assess their competitive positions within changing market scenarios.

Contacts

Technavio Research
Jesse Maida
Media & Marketing Executive
US: +1 844 364 1100
UK: +44 203 893 3200
Email: [email protected]
Website: www.technavio.com/

SOURCE Technavio


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