At BAGI, we understand the importance of keeping abreast of changing trends and conditions in the new home construction industry. We find that being proactive is the best way to prepare our members to weather market upsets and overcome challenges while also helping prospective home buyers on their journey to homeownership during these uncertain economic times.

Market Trends and What They Tell Us

While we finished the last year steady, 2024 kicked off with tremendous growth! Year-over-year, there was a 77% jump in overall demand for new single-family home construction from the start of 2023 to the beginning of 2024.

We find that each 1% drop in interest rates equates to an approximate 10% drop in a homeowner’s monthly payments. For this reason, the gradual decline and stabilization of interest rates has sparked a new wave of demand from those who have been on the fence about purchasing a lot and building a home but now want to take advantage of lower rates to lower their mortgage payments.

New buyers will also benefit from the stabilization of vendor and supplier pricing. Since the industry-wide supply chain disruption starting in 2020, vendor pricing and supply availability has been all over the map, with pricing on a continuous upward climb and hit or miss availability for crucial supplies, like lumber. We are happy to report that, while prices continue to climb due to inflation, the price hikes are not as frequent or dramatic as they have been in previous years.

We still face supply challenges, but shortages are easing, and we are now better able to locate and secure the crucial supplies we need to build high quality homes. Labor shortages, however, continue to impact the housing market, with builders struggling to find skilled workers and retain their current workforce. This may impact the speed of construction and impact timelines for move-in.

Rest assured that BAGI member builders and suppliers are held to the highest standards for building quality and professionalism. This means that our members do not hire unskilled workers or cut corners. When you build or remodel with a BAGI member, you can trust that your project will be completed well and to your satisfaction, despite any supply or labor challenges builders may be facing.

To learn more about our standards and access our consumer resources, visit the consumer section of our site to search for a builder, remodeler, or other service provider.

Insider Insights Give BAGI Members a Competitive Edge

As economic turmoil continued to plague the new home construction industry at the start of 2023, BAGI leadership felt the need to provide members with exclusive insider market insights to help them get a competitive edge and better serve their customers. Hence, the introduction of our monthly Insiders Edge report, a publication made possible by our generous sponsors – 84 Lumber, D.R. Horton, and Weber Concrete Construction – that provides BAGI members (and the public!) with valuable industry updates from the Indianapolis area housing market, as well as extensive data on nationwide housing market trends.

We also created a Market Info section on our website to provide BAGI members and the public with convenient access to the latest single-family housing permit numbers, Insiders Edge reports, and other relevant market updates.

Whether you’re a member of the construction community or simply want to keep up with the latest industry trends, we invite you to check out our Market Info section and take advantage of the resources we post there. Check out Insiders Edge.

As we transition into the second quarter of 2024, the overall health of the homebuilding industry is on its way to recovery. Steady interest rates and high demand for new homes are fueling growth and stability in the market. However, as in the past few years, supply chain delays and the ongoing shortage of skilled, reliable labor can pose significant challenges to homebuilders and homebuyers. BAGI members are encouraged to anticipate these issues and develop strategies for overcoming the supply and labor challenges to meet the rapidly rising demand for housing.

No matter what the market holds, BAGI will be by our members’ sides, helping them navigate the ever-changing market and regulatory landscape, advocating for positive policy change, and creating opportunities for them to grow professionally and provide the highest quality of service to Central Indiana homeowners.