Economist Shares Outlook on Housing Market During FGIA Virtual Summer Summit
At the Fenestration and Glazing Industry Alliance Summer Summit, economist Robert Dietz, Ph.D. (National Association of Home Builders), shared the state of the U.S. residential market to help members navigate a changing economic landscape.
U.S. Economy in Flux
“There is slowing economic growth at this time,” said Dietz. “There is a 40% probability of a recession over the next three quarters. To be clear, a probability of 20% is normal, so this is somewhat elevated. Energy prices have sparked consumer inflation. (The year) 2025 started slowly with the economy. Uncertainty around tariffs toward the end of last year did not help.”
Consumer Debt
Other factors have slowed growth, Dietz said, including student loans and other types of borrowing. “More and more car owners are underwater with their loans,” he said. “That is a drag on consumer spending. A lot of people are using credit cards as loans right now.”
Data Centers
On the positive side, data center construction spending has really taken off since 2022, when ChatGPT was released to the public,” Dietz said. Growth moderated in 2025. “Data centers are driving nonresidential construction,” he explained. “The demand for traditional homebuilding is still there. The deficit is narrowing, but affordability challenges will persist.”
Lumber Prices
Construction costs are also rising, said Dietz, partially because of higher diesel and gas prices. “Lumber prices have been roughly flat since 2023,” he said. “There is a risk of higher lumber prices later this year because we get a quarter of that from Canada. The current tariff rate for [lumber] there is twice what was in place at the start of the second Trump term.”
Remodeling
Finally, remodeling is showing growth for residential construction and is gaining market share. “There will be a solid demand for housing during the second half of the decade due to the aging population,” Dietz predicted.
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