Builders’ Top Challenges for 2026

The most significant challenge builders faced in 2025 was high interest rates, as reported by 84% of builders in the latest NAHB/Wells Fargo Housing Market Index survey.  A smaller, albeit still significant share of 65% expect interest rates to remain a problem in 2026. The next four most serious issues builders faced in 2025 were buyers expecting prices/interest rates to decline (81%), concern about employment/economic situation (65%), the cost/availability of developed lots (63%), and negative media reports making buyers cautious (62%). Builders expect these challenges to persist with limited improvement in 2026.

In addition to those top tier challenges, 54% to 61% of builders also reported facing serious problems in 2025 with cost/availability of labor (61%), rising inflation in the US economy (59%) gridlock/uncertainty in Washington (58%), impact/hook-up/inspection and other fees (57%), and local/state environmental regulations and policies (54%). Looking ahead at 2026, fewer builders expect high interest rates (65%) rising inflation in the US economy (46%) to be a significant problem. On the other hand, builders don’t anticipate much change around labor shortages, uncertainty in Washington, fees, or local regulations.

Builders have been asked about their most serious challenges every year since 2011. High interest rates have been a problem for a negligible share of builders (under 10%) during most years, except for 2022 (66%), 2023 (90%), 2024 (91%) and 2025 (84%). Until 2021, relatively few builders reported problems with buyers expecting prices or interest rates to fall, but that share has been rising steadily for the past four years and reached a record high of 81% in 2025. In 2011, concern about employment/economic situation was reported as a significant problem by 79% of builders. This concern faded over the next decade, and by 2021, only 24% cited it as a top issue. But it has escalated rapidly since then, and in 2025 65% of builders rated it a major challenge – the highest since 2012.

The cost/availability of developed lots has been a serious challenge to most builders in 10 of the 15 years of the series history. In 2024 and 2025, the share reached 63%, matching the record high set in 2019. Negative media reports making buyers caution was a significant problem for 63% of builders in 2011. During the 2012–2021 period, the share consistently remained under 50%. From 2022 onward, however, most builders saw it as a serious challenge again, with the share reaching 62% in 2025 – the highest since 2011.

For additional details, including a complete history for each reported and expected problem listed in the survey, please consult the full survey report.

Originally posted at EyeOnHousing