5 Trends That Emerged From the New-Home Industry’s Mega Event
By Melissa Dittmann Tracey
“Design & Construction Week” offered up several emerging themes that could be applicable to your real estate business this spring. In one of the largest annual gatherings of construction and design professionals, the Las Vegas event, occurring in late February, was filled with education sessions and 1.2 million square feet of exhibits showing off the latest building innovations and home design trends.
In covering the combined 2025 International Builders’ Show and Kitchen & Bath Industry Show, I spotted some of the following emerging trends and themes.
1. It’s still a good time to buy a new home—and have a new-home niche in real estate.
New-home sales in 2024 comprised the highest market share within home sales over the last 20 years. More home buyers have been turning to newly built homes as an option.
Builders are addressing growing housing affordability concerns and offering up some temptations that may outshine the resale market. Nearly 60% of builders are using sales incentives to draw buyers in, such as contributing funds toward closing costs, design credits, and mortgage rate buy-downs. Also, about a quarter of builders report they’re cutting home prices, with the average price reduction being 5%.
“With resale inventory increases occurring this year, existing home sales will likely need to do more price discovery and discounting—just like homebuilding has done over the last two years,” Robert Dietz, chief economist of the National Association of Home Builders, said at an economic outlook session during the conference.
2. Buyers are discovering more choices.
The number of listings in the existing home market has been increasing lately, although housing shortages remain in most markets. Builders, however, have a message to buyers: We can offer more choices!
Some options may be move-in ready, too. Builders have increased the number of spec homes—properties that are built before a buyer is in place. A quarter of new homes nationwide at the end of last year were spec homes. Spec homes can help prospective buyers avoid a lengthy construction process and move right in, along with possibly snagging some of those builder sales incentives or discounts.
Builders in many markets are also reportedly increasing townhome construction, which tends to cost less than single-family detached homes and can be appealing to those who desire medium-density and more walkable neighborhoods. Townhome construction nationwide has surged to a multi-decade high, according to the builder’s trade group.
As for aspiring buyers who just aren’t ready to take on a house payment yet, builders have an option for them too: Built-for-rent. Builders have increased the number of single-family homes they’re constructing specifically for the rental market. Renters can get a bigger space with a single-family home to accommodate growing families, a yard for their pets, and possibly buy extra time to save up for a down payment on a future home purchase.
3. Homebuilders have concerns.
Looming around hopes that the new-home market’s momentum will continue in 2025, economists also were quick to identify wildcards that could tamper growth.
Regulatory costs comprise nearly $100,000 of the price of a new home. And while builders seemed hopeful that regulatory reform under the Trump administration could help bring costs down, they expressed concerns over how tariffs could raise prices. For example, 32% of appliances and 30% of softwood lumber come from international trade, and builders fear tariffs could elevate those costs.
4. Home remodeling continues to soar.
Home prices have climbed nearly 50% in the last five years, and many homeowners may be feeling rich from all that equity. They’re re-investing their homes. Remodeling contactors continue to report thriving business—and possibly resulting in long waits for clients due to high demand.
The three key areas homeowners are focusing on for their home upgrades are kitchens, bathrooms, and outdoor spaces. Homeowners are tackling small projects and larger ones—with some owners even taking on three rooms at a time when they remodel, according to Houzz, a home remodeling site. The State of Home Spending report, conducted by the home improvement site Angi, recently identified the following top remodeling projects homeowners have planned for 2025:
- Regular maintenance
- Paint interior space
- Remodel a bathroom
- Install new flooring
- Install new landscaping
- Add or replace windows
- Install new appliances
- Paint/stain exterior
- Install new fencing
- Install a smart home device
- Remodel the kitchen
- Appliance repair
5. The ‘wellness home’ is a growing mantra.
Homes aren’t just being built to look good but to feel good. Call it biophilic design, dopamine decor or something else, but homes are becoming a sanctuary of restful retreat as well as a place for expressionistic style.
Wellness design is more than just adding a house plant. Designers are showing how it has become centered on blending the indoors and the outdoors, such as through movable doors, incorporating larger and more windows, and bringing in organic materials and textiles, and earthtone color schemes.
Homes are incorporating circadian rhythm lighting, where indoor smart lights can be set to wake up homeowners or help them prepare to fall asleep or create warm, soothing spaces to compliment moods.
Bedrooms are becoming ultra-focused on boosting sleep wellness, such as by adding materials that offer sound-absorbing qualities, layered textures, organic textiles, blackout drapery, and design centered on creating a calming environment.
Product innovations also are hoping to give a health boost at home, like the growing popularity of ice plunge baths for inside the home. Kohler recently debuted one that looks like a bathtub to be added inside or out. The icy bath is believed to help speed healing, muscle recovery and possibly even boost your metabolism.
Melissa Dittmann Tracey
ABOUT ME:
Melissa Dittmann Tracey is an award-winning journalist who covers the latest real estate news and trends. You can hear her weekly on the syndicated radio show and podcast, Real Estate Today, in her housing trends segment, “Hot or Not?” She is the creator of the Styled, Staged & Sold blog and a frequent contributor to Houselogic.com and REALTOR Magazine. She’s also the host of The Housing Muse podcast at http://www.housingmuse.com. Follow her on Instagram or X @housingmuse.