Oklahoma Home Builder News

The article below was written by Dr. Robert Dietz, Chief Economist at the National Home Builders Association.

Despite tax policy wins for housing and the construction industry, the single-family housing market has disappointed thus far in 2025.

Single-family builder confidence, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), retreated in August to a level of 32. Builder sentiment has been in negative territory (a sub-50 reading on the HMI) for 16 straight months and stuck in a low range of 32 to 34 since May. The HMI’s buyer traffic reading remains very low at a level of 22, as elevated interest rates and construction/price growth has priced out many prospective home buyers.

Challenging affordability conditions continue to weaken single-family home construction in 2025. Single-family starts increased 2.8% to a 939,000 seasonally adjusted annual rate, but are down 4.2% on a year-to-date basis. The slowdown in single-family home building has narrowed the home building pipeline. There are currently 621,000 single-family homes under construction, down 1% in July and 3.7% lower than a year ago. This is the lowest level since early 2021 as builders pull back on supply.

However, multifamily development is benefiting from the low levels of for-sale inventory. The multifamily sector, which includes apartment buildings and condos, increased 9.9% in July to an annualized 489,000 rate and is on pace to post a larger than 10% gain for starts in 2025. Indeed, the NAHB Multifamily Production Index remains near a neutral reading, coming in at a level of 46 for the second quarter.

While soft, the housing market is being supported by a relatively stable economy that registered a 3% GDP growth rate in the second quarter and an unemployment rate near 4%. However, ongoing tariff uncertainty and anemic job growth continue to act as headwinds to the economy and housing sector. 

The CPI measure of inflation held steady at a 2.7% year-over-year growth rate in July. However, there were hints of tariff-induced inflation as the core goods inflation reading has now accelerated somewhat over the past three months. Residential construction building costs increased in July in the separate PPI data; however, this was not a tariff-related effect as the PPI data does not count tariff costs. Overall, such building materials were up 2.8% from a year ago.

The effects of tariffs on prices, while measurable, are smaller than those feared back in April (due to trade deals resulting in lower tariff rates). If such effects remain one-off changes and relatively minor, the remaining economic backdrop confirms that the Federal Reserve should proceed with additional rate cuts this fall. 

NAHB is forecasting two rate cuts before the end of 2025. Doing so will provide support for those parts of the economy, particularly housing, that have been dealing with persistently elevated interest rates. Such monetary policy action will be particularly beneficial for land development and construction loan financing. This market remains tight, with interest rates averaging 8%. Declines for the Fed-controlled federal funds rate will have a direct one-for-one impact on such loans and enable more affordable development.

HUD is currently taking public comments regarding requiring all homes receiving a HUD loan to meet IRC 2021 Energy Rules without any amendments. This would be detrimental to the overall cost of housing in Oklahoma and across the country. Here are few reasons why:

• Significant Upfront Cost Increases: Compliance with 2021 energy codes can add $5,000 to $20,000+ to the construction cost of a single-family home, depending on location and design, pricing many buyers out of the market.
• Disproportionate Impact on Affordable Housing: These codes impose uniform standards that don’t account for the limited margins of affordable housing projects, potentially making them financially unviable.
• Limited Return on Investment for Buyers: Many homebuyers, particularly low-income, will not see immediate or meaningful savings on energy bills to offset the added mortgage or rent costs.
• Barriers to Entry for First-Time Buyers: Increased construction costs raise down payments and monthly payments, blocking first-time and working-class families from homeownership.
• Minimal Emissions Impact in Some Markets: In regions already using cleaner energy or efficient homes, the incremental environmental benefits may not justify the economic burden imposed by strict code requirements.
• Discourages Small Builders and Rural Development: Smaller builders and rural developers often lack the economies of scale or resources to meet strict code demands, reducing rural housing options.

Thank you for taking time to help!

Ryan Martinez Executive Officer, OKHBA

Please click the link below to leave your comment! I have also included a draft comment that you can copy and paste into the comment section if you so desire!

Leave your feedback here!

Draft Comment Below:

I am writing to express serious concern regarding HUD’s potential requirement that new housing comply with the 2021 International Residential Code (IRC) energy provisions in order to qualify for HUD-insured loans. While I support energy efficiency and sustainability in principle, implementing this mandate without adequate consideration of cost implications would significantly increase the overall cost of housing, particularly for low and moderate income families—the very populations HUD is intended to serve.

According to industry estimates and recent analyses, the 2021 IRC energy code mandates can increase construction costs by thousands of dollars per unit, often without a clear or immediate return on investment for homeowners. These requirements include higher insulation standards, upgraded mechanical systems, and costly building envelope improvements that may not be feasible in all climates or economic conditions. For many builders and developers, especially those producing affordable housing, this added burden could reduce production and eliminate marginal projects altogether.

The unintended consequence of this well-intentioned rule may be a reduction in housing supply, increased home prices, and further restricted access to homeownership and rental opportunities—particularly in underserved rural and urban communities. It could also disproportionately affect first-time buyers and communities of color.

HUD’s role is critical in ensuring access to affordable, quality housing. Imposing costly new mandates without appropriate consideration could undermine this mission at a time when the country is already facing a housing affordability crisis.

The article below was written by Dr. Robert Dietz, Chief Economist at the National Home Builders Association.

The word thus far for the 2025 housing market is "disappointing." NAHB started the year expecting relatively flat conditions due to anticipated policy change that would implement much-needed tax policy certainty and regulatory reform. Instead, persistently elevated interest rates, ongoing challenges for housing affordability and weakening consumer confidence have moved many buyers to the sidelines. This reduction for housing demand comes as existing home inventory is rising, leading to a reduction in construction activity and growing reporting of home price cuts.

For example, the NAHB/Wells Fargo Housing Market Index (HMI) measure of home builder confidence came in at a level of 33 in July. While one point higher than June, the July reading marks the 15th straight report in negative territory. The traffic component of the HMI was 20 in July, the lowest reading since the end of 2022. Marking a record since NAHB began collecting this data in the post-Covid period, the number of builders implementing price cuts increased to 38% in the most recent HMI.

Consistent with these weak readings of builder sentiment, single-family housing starts declined 4.6% in June, dropping to an 883,000 seasonally adjusted annual rate. For the first half of 2025, single-family starts are down almost 7% compared to the first half of 2024. Weakness was seen in most regions, especially in the South where single-family construction is down 12% on a year-to-date basis. Countering this trend, single-family home building is up 10% for the first half of 2025 in the relatively housing affordability-advantaged Midwest.

The 2025 challenges for the for-sale housing market have boosted the outlook for the apartment development sector. Multifamily 5+ unit construction was up 30% in June, with this sector of the construction industry up more than 15% for the first half of 2025. With fewer home owners moving, the remodeling market continues with solid conditions. The NAHB/Westlake Royal Remodeling Market Index (RMI) came in at a positive level of 59 for the second quarter of the year, down year over year, but continuing a five-year trend of positive market readings.

Macroeconomic conditions continue a mixed trend as the summer progresses. Inflation picked up in June, with the CPI increasing to 2.7% -- a four-month high. Shelter inflation continued to decline, falling to a still elevated rate of 3.8%. Given that shelter inflation has been the leading source of inflation for more than two years, this data is a signal for the Federal Reserve to continue cutting the federal funds interest rate at its coming policy meetings. However, some evidence of tariff effects are appearing in the inflation, including gains for toys, apparel and some home furnishing goods.

While the recently enacted One Big Beautiful Bill Act provides some policy certainty and pro-growth tax cuts, uncertainty remains the challenge for macro conditions in 2025. The ongoing drama around tariffs is concerning for employers and employees in sectors reliant on imports and border states with regional economies dependent on trade. And the rising government debt levels, combined with uncertainty in international capital markets including issues regarding international buyer demand for U.S. Treasuries, have placed upward pressure on long-term interest rates. With mortgage rates stuck in a range near 7%, this remains the most pressing challenge for the housing market as we enter the second half of 2025.

Save the date! The 2025 Oklahoma Building Summit & Expo will take place on Wednesday, October 1st and Thursday, October 2nd at the Grand Casino Hotel in Shawnee.

Make plans to join us for home building industry news, guest speakers, networking, and much more!

Exhibitors: Don't miss out on the opportunities to show off your products and services at our annual event.

• 1 booth maximum per exhibitor (this is due to space)
• For information about the event and to reserve a booth, please check out this page.

To book a hotel room, follow the instructions below:

Reserve a Room by Phone:
Call the Grand Casino Hotel at 1-405-964-7777- Press 1 for hotel 
Mention your Group Name: OK Home Builders Association 2025

Online Booking:
Go to www.grandresortok.com
Book Now at the upper right corner
Enter Group Offer Code: OKHBA25
Select your Group
Choose your arrival date and Departure Date 
Click "Show Rooms" then Book!

Please help us welcome Ryan Martinez as the new Executive Vice President of the Oklahoma Home Builders Association! 

A passionate and accomplished leader, Ryan has built a reputation for driving both top-line and bottom-line performance across government and private sectors. With extensive experience in corporate leadership, operations management, sales, marketing, business development, and fundraising, Martinez excels in delivering innovative solutions and operational excellence that foster sustainable growth. Known for a forward-thinking approach, Ryan is an expert at transforming organizational vision into tangible results through strategic planning, talent acquisition, client retention, and a strong focus on continuous improvement. 
 
Previously, Ryan served as a State Representative in the Oklahoma House of Representatives, where he led the state's $12B budget negotiations and played a pivotal role in shaping economic policies. His career has been marked by a commitment to stakeholder engagement, ethical leadership, and developing high-performing teams to achieve corporate and public sector objectives.
 
With a proven ability to drive growth, optimize operational efficiency, and build lasting relationships, Ryan is a visionary leader dedicated to achieving success through innovation, strategic alignment, and a focus on operational excellence.

The article below was written by Dr. Robert Dietz, Chief Economist at the National Home Builders Association. 

A slight decline in mortgage rates and limited existing inventory helped new home sales to edge higher in February even as housing affordability challenges continue to act as a strong headwind on the market.

Sales of newly built, single-family homes in February increased 1.8% to a 676,000 seasonally adjusted annual rate from a revised January number, according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. The pace of new home sales in February was up 5.1% compared to a year earlier.

New home sales have been roughly flat thus far in 2025, as ongoing limited inventory of existing homes in many markets continues to support the need for new homes. Lower mortgage rates helped to lift demand in February, despite other near-term risks such as tariff issues and affordability concerns.

A new home sale occurs when a sales contract is signed, or a deposit is accepted. The home can be in any stage of construction: not yet started, under construction or completed. In addition to adjusting for seasonal effects, the February reading of 676,000 units is the number of homes that would sell if this pace continued for the next 12 months.

New single-family home inventory in February continued to rise to a level of 500,000, up 7.5% compared to a year earlier. This represents an 8.9 months’ supply at the current building pace. The count of completed, ready-to-occupy homes available for sale increased again, rising to 119,000, up 35% from a year ago and marking the highest count since mid-2009. 

However, after accounting for a low 3.4 months’ supply for the existing single-family market, total market inventory (new and existing homes) stands at a lean 4.2 months’ supply per NAHB estimates. A balanced market is typically defined as a 6 month’s supply.

The median new home sale price in February was $414,500, down 1.5% from a year ago. The count of sales was supported by a gain of transactions priced between $300,000 and $400,000 in February.

Regionally, on a year-to-date basis, new home sales are up 12.4% in the South but down 6.7% in the West, 13.5% in the Midwest and 50.8% in the Northeast.