Plywood and Engineered Wood Manufacturers NAICS 3212

Jul 23, 2025 - More Multifamily Development Outside Major Metros

• Apartment construction is increasingly shifting away from dense urban centers toward less populated and more affordable regions, according to the NAHB’s Q1 2025 Home Building Geography Index and reporting by Smart Cities Dive. Since 2016, large metro core counties have seen a 9.6 percentage-point drop in market share for apartment starts, hitting a low of 35.5%. The trend is fueled by affordability concerns, demographic shifts—especially the rise of older renters seeking suburban lifestyles—and project owners favoring lower-cost developments in exurbs and rural areas. Developers are pursuing projects farther out where land is cheaper and expansion is easier, though total activity in these areas remains relatively small.
• North American single-family construction and engineering spending in 2025 is expected to grow by 1% after increasing an estimated 2% in 2024, according to FMI’s third-quarter 2025 North American Engineering and Construction Outlook. FMI projects that 30-year mortgage rates will stay between 6% and 7% through 2026, impacting affordability. A recent jump in new apartment supply and unfavorable cost conditions will reduce multifamily spending by 9% in 2025, but the widening cost gap between renting and buying a home supports the multifamily market in the long term. The aging of the US housing stock and high home values drive demand for residential improvement spending, but high interest rates and elevated materials and labor costs will limit home improvement spending to 1% growth in 2025.

• Single-family housing starts decreased 4.6% in June 2025 from May, marking the weakest starts activity since June 2024, according to the US Census Bureau. Permitting activity for single-family housing – an indicator of future homebuilding activity – rose 0.2% in June compared to the month before. High interest rates, economic uncertainty, and an oversupply of unsold new homes are weighing on the US homebuilding market, according to Reuters. The inventory of new homes waiting to be sold is the highest since 2007. Some economists suggest that lower interest rates would be a lifeline for the sluggish housing market, but the Federal Reserve is concerned that lowering rates could exacerbate the inflationary effects of the Trump administration’s tariff policies.
• Home builder confidence in the single-family market rose slightly in July but remained in negative territory for the 15th consecutive month, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), increased one point to 33 in June 2025. Any HMI reading over 50 indicates that more builders see conditions as good than poor. The US housing market faces headwinds from high interest rates and economic uncertainty. The HMI survey also showed that 37% of builders have reduced home prices to lure potential buyers off the sidelines, although the average price reduction of 5% has remained unchanged since November 2024.