The building products and construction materials industry faced macroeconomic headwinds during 2023 from increased interest rates, higher raw material costs and a challenging labor market. Despite 2023 trends, early 2024 shows near-term optimism with recent positive performance in residential housing starts and slowly normalizing single-family home sales volume and pricing. Non-residential construction activity rebounds have been supported largely by public infrastructure investments.
Single-family and multifamily housing starts in the U.S. increased by 18.8% and 10.2%, respectively, during 2023. Aggregate U.S. housing starts for 2023 remained above the 10-year historical average. Housing starts in the South continue to lead the U.S. as the population shifts to warmer climates.
New home sales in the U.S. increased by 4.4% in 2023, while existing home sales declined by 18.3% over the same period. For existing homes, buyers grappled with high borrowing costs and sellers maintained high value expectations – creating a divide that stalled activity. Volume and prices of new and existing home sales are expected to rise through 2025.
U.S. home prices increased in 2023, despite higher interest rates. The average home price increased by 5.4% throughout 2023.
U.S. remodeling activity slowed in 2023 after reaching an all-time high in 2022. Remodels are forecast to ease still in 2024 as homeowner budgets are squeezed by higher interest rates and higher costs for construction materials.
Non-residential construction in the U.S. increased by 21.0% overall, driven by record spending increases in the manufacturing sector and strong growth in the education and healthcare sectors.
The Canadian housing market experienced comparable interest rate pressure during 2023 but has shown a promising start in 2024 for both single-family and multifamily residential categories.
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