A lot of people are trying to figure out where the housing market is headed, but it feels like there are more questions than answers right now. Here’s our take on what’s actually happening in the new home construction market from job sites, supply orders, and real conversations.
A hesitant market full of mixed signals
People are waiting: that’s the best way to describe it. They’re nervous about interest rates, the economy, and headlines that suggest everything’s about to crash. At the same time, inventory is high, especially on the resale side.
So why is everyone trying to sell? Because during the COVID boom, home prices went way up. A lot of that was fueled by inflation, record-low interest rates, and an enormous amount of money pumped into the economy. Real estate became a place where that money landed, and prices jumped accordingly.
People are now trying to cash out, but buyers aren’t biting at pandemic-era prices, especially for homes that need work. We’re seeing price drops of 11–21% below list in our area, even on homes that are fully redone, which is unusual.
Will house prices continue to come down?
Short answer: probably not in a major way. Right now, although demand has cooled, sellers aren’t exactly slashing prices. In most cases, people aren’t willing to let go of the gains they see on paper, and they’d rather sit tight than take a loss. Even homes that are dropping in price still aren’t going below what the seller paid originally. They’re just getting more realistic.
Add to that:
- The rental market is still strong
- Unemployment is low
- The stock market’s doing well
- Public companies are still turning profits
Those traditionally aren’t leading indicators of a big housing crash.
Where we are seeing price drops is on older homes that need major work. Buyers aren’t paying top dollar for something that needs $100K+ in updates. But if you’ve got a house that’s priced right, that’s in good shape, and that makes sense for a buyer’s lifestyle, it will move.
People still want to buy, especially in desirable locations. They’re just being more selective, and they want value. That’s not a bad thing; it’s actually healthy. The days of throwing any property on the market and getting multiple offers in 24 hours are behind us. Now, it’s about making it make sense—for the seller and the buyer.
You may also be interested in: Is it worth remodeling a bathroom before selling?
New construction costs aren’t coming down
Our costs to build new construction don’t drop just because the resale market does. Materials such as drywall, concrete, and framing lumber still go up every year. So, is building a custom home more expensive than buying an existing home? We compare the costs and benefits in this blog post.
What about the impact of tariffs?
Although a lot of people are concerned about the impact of tariffs, the only real recent spike in construction costs has been plumbing fixtures, and even that felt more like vendors hedging for potential tariffs than actual cost increases.
For context: in a million-dollar home, plumbing fixtures might cost $15,000. A 15% tariff adds $2,250. That’s not moving the needle for most of our clients.
Labor isn’t the problem (yet)
We’ve heard concerns about immigration enforcement (ICE) and labor shortages. Right now, the market’s slow, and subcontractors are actively looking for work. The real concern is what happens when demand picks up again. If we return to a market like we saw last year, the question becomes: will the Jacksonville area have the workforce to keep up?
You may also be interested in: How long does it take to build a custom home?
Renovations are about to boom
This might be the most important trend we’re watching. With so many older homes on the market and buyers wary of overspending, renovation is going to play a much bigger role over the next five-to-ten years in our area.
There’s a huge opportunity in updating good bones. We’re already seeing clients come to us asking if it makes more sense to remodel than build. In a lot of cases, the answer is yes, especially if they already own the land and don’t want to give up a low mortgage rate.
You may also be interested in: The shift toward investing in home expansions
Final thoughts on the new home construction market in 2025
People are moving more cautiously, weighing options, and looking harder at long-term value. That’s where smart builders, honest pricing, and high-quality craftsmanship still win. If you’re considering a custom build, a renovation, or trying to sell in this market, our advice is simple: work with professionals who can guide you with real numbers and a steady hand. That’s what we’re here for, so don’t hesitate to get in touch.
