So far in our 2025 homebuilder trend check-in, we’ve covered how builders are innovating on the jobsite and managing risk in an increasingly complex environment. But building smarter and safer is only part of the story. In the second half of the year, the biggest differentiators may come down to how builders evolve their operating strategy.
Trends 7-10 highlight the shifting demands reshaping how builders attract buyers, deliver services, and plan for long-term growth. From affordability pressures to AI-powered operations to the rising importance of customer education and modernized warranties, builders are being pushed to rethink what it takes to survive—and thrive—in today’s turbulent housing market. It’s not about scrapping the fundamentals. It’s about integrating smarter strategies that keep buyers engaged, protect margins, and meet today’s homeowner expectations.
In this final installment of our three-part series covering PWSC’s Top Residential Construction Trends 2025 report, we revisit the forces pushing builders to adapt—from the first sales conversation through the final year of warranty coverage.
If you missed the first two parts of our 2025 trend check-in, catch up here:
Trend #7: Housing Affordability and the Balance Between Quality and Price
Affordability remains a defining challenge for builders in 2025. As of late May, the median list price for a home stood at $409,933, and mortgage rates continue to hover above 6%. Although we’d predicted at least one interest rate cut by now, the Federal Reserve has held steady, citing tariff uncertainty.
Builders continue to carry the weight of affordability. Around 60% are using sales incentives such as rate buy-downs, design credits, and closing cost assistance to attract budget-conscious buyers. New-home listings are four times more likely to offer a rate buy-down. Twenty-six percent of builders also reduced prices in early 2025, with average discounts around 5%.
Despite these headwinds, new homes now account for 14.5% of real estate transactions— one of the highest shares in two decades—a trend likely to continue throughout 2025. Builders are leaning into affordability-friendly formats:
- Townhomes hit a multi-decade high, making up 19% of single-family starts
- Built-for-rent homes now comprise 10% of new construction
- Move-in-ready spec homes made up 25% of inventory at the end of 2024
Shifts in buyer preferences are also reshaping what builders offer. While millennials still desire space—reporting a median ideal home size of 2,408 square feet—52% would choose a smaller home with better features over a larger one with fewer amenities. Builders are following suit: The median new-home size fell to 2,150 square feet in 2024, the lowest in 15 years. To maximize usable space, many are adding patios and porches as standard exterior features.
Even with cost pressures, demand remains strong. A recent Zonda survey found that 20% of renters are willing to pay up to $500 more than their current rent for a mortgage payment, and over 10% would pay up to $1,000 more. About one-third expect to buy a home in the next three to five years—nearly double the share from 2022.
As affordability challenges persist, builders finding creative ways to meet demand without sacrificing quality are leading the way. Smaller homes, smarter incentives, and buyer-friendly formats will be the winning formula for 2025’s challenging housing market.
Trend #8: Builders as Educator
Our 2025 forecast that builders would take on the role of educators is proving more accurate by the day—and the need is growing. With affordability challenges and competitive pressure intensifying, education has become one of the most powerful tools builders have to stand out, sell more, and improve outcomes.
Across the country, sales teams are receiving deeper product training to confidently explain space-conscious designs, sustainable materials, and mortgage buy-down strategies. As affordability remains top of mind for buyers, understanding how to translate complex features into real financial benefits—like utility savings or tax incentives—is key. In a market where new homes are competing with historically low-interest-rate resales, knowledge isn’t just power, it’s a sales necessity.
On the construction side, builder-led training is helping address the skilled labor shortage. With nearly half a million new workers needed this year, many entering the trades have minimal experience. Builders investing in hands-on upskilling, safety refreshers, and trade partnerships are improving quality while protecting long-term margins.
Meanwhile, customer service teams are stepping into brand ambassador roles. Builders that train service teams to manage expectations, resolve issues quickly, and support homeowners post-sale are seeing higher satisfaction and fewer claims.
The biggest shift? Educating the buyer. Builders offering home maintenance guides, seasonal checklists, and simple how-to’s are setting their buyers—and their reputations—up for long-term success. Looking ahead, builders that embrace education at every touchpoint will have a clear edge.
Trend #9: Embracing the AI Revolution in Homebuilding
We said the AI revolution was coming for the homebuilding industry. Well, it’s here. Estimates project AI spend in real estate to grow by more than 36% this year, reaching more than $300 billion. It’s a clear sign of builders using AI not just for efficiency, but as a critical competitive advantage.
Predictive analytics is one of the most impactful applications. Builders are using it to forecast market demand by geography, anticipate buyer preferences, and plan around potential supply chain disruptions. These insights allow for smarter land acquisition, better inventory control, and more effective marketing strategies. Predictive models also help builders estimate construction costs and rental income, informing decisions from budgeting to project planning.
On the design side, AI tools now generate optimized floorplans and layouts using buyer preferences, building codes, and utility constraints. These solutions reduce design timelines and help buyers better visualize their homes—leading to faster buying decisions and fewer change orders. During construction, AI enhances safety by monitoring jobsites in real time, detecting hazards, and tracking productivity to prevent delays and reduce risk.
Post-sale, builders are leaning into AI to improve the homeowner experience. Automated systems streamline warranty management, while smart home integrations and AI-driven reminders support timely maintenance. These tools help prevent costly service issues and build long-term satisfaction. At the same time, AI offers builders valuable feedback loops to refine future products and improve quality.
AI is also transforming customer engagement. Chatbots and virtual assistants provide 24/7 support, while AI-enhanced marketing tools personalize campaigns, qualify leads, and help sales teams move buyers through the funnel more effectively. With AI’s ability to adapt and learn over time, the customer journey becomes more intuitive, responsive, and tailored to individual needs.
Looking ahead, AI is no longer a luxury, it’s becoming table stakes. Builders that invest in AI now are laying the groundwork for more resilient operations, stronger customer relationships, and sustained growth in an increasingly data-driven market.
Trend #10: Old Warranties Won’t Work for New Homes
In 2025, the days of “set it and forget it” warranties are over. What began with Texas’s 2023 structural warranty reform has gained momentum. More states are evaluating statutes of repose, redefining defect liability timelines, or tightening requirements for mediation and arbitration language. While few have officially shortened structural coverage windows, legal precedent is increasingly forcing builders to defend warranties written for a different era.
Builders who haven’t updated their warranty language—or the systems that support it—are feeling the consequences. The industry is experiencing a rise in claims disputes tied directly to outdated terms, vague exclusions, or missing coverage. This is especially true when it comes to energy-efficient systems and appliances, smart home features, and sustainable materials—all things buyers want more of. As homes get more complex, warranties need to do more than check a box—they must accurately reflect the products and expectations driving the sale.
At the same time, today’s buyers are savvier. They read the fine print, they Google terms, and they expect answers quickly. Builders still relying on paper-based processes or static PDFs risk not only litigation, but brand damage. Homeowners want 24/7 support with quick responses and transparent processes. Mess that up and expect a hit to your brand as well as the bottom line with potential litigation to follow.
Heading into 2026, the most forward-thinking builders are adopting dynamic warranty strategies—ones that evolve with local laws, changing technologies, and consumer expectations. Staying current isn’t just about mitigating risk. It’s about delivering a better experience and maintaining trust long after the closing.
Plan Ahead with PWSC
Homebuilding in 2025 isn’t just about what you build—it’s about how you do business. As builders rethink sales, service, and post-close support, staying agile is essential.
PWSC helps builders adapt with flexible warranty solutions, and customer care tools that turn warranty service into a brand advantage. From the first walkthrough to the final fix, we’re here to support every step.
Need help updating your warranty approach or strengthening service after the sale? Contact PWSC to explore solutions that protect what matters most.
