BiggerPockets Daily Tariffs? Or is it Just the Economy? Why Developers Are Pulling Back
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Jun 18, 2025 New home construction has plummeted nearly 10%, marking the slowest pace since May 2020, influenced by rising costs and labor shortages. Baby boomers are holding onto their homes, tightening supply for younger buyers. This trend creates generational housing challenges, particularly for millennials and Gen Z, who struggle with availability and high prices. As older homeowners choose stability over selling, the dynamics of the real estate market continue to shift, impacting builders and future buyers.
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Builders Pull Back Due to Uncertainty
- New home construction fell nearly 10% in May, the slowest pace since May 2020, due to rising inventory and softening demand.
- Builders are pulling back mainly because of economic uncertainty, not tariffs, which are less impactful than before.
More Completed Homes Boost Buyers
- Completions of homes rose by 5.4% in May, providing more move-in ready inventory for buyers.
- This increase gives buyers more leverage to negotiate despite the slowdown in new construction.
Boomers Hold Tight on Homes
- One third of baby boomer homeowners say they'll never sell their homes, and another 30% plan not to sell for at least a decade.
- This contributes significantly to tight housing inventory and affordability issues for younger generations.