• Home
• » About
• » Blog
• » Change in the Air: How Builders Plan to Navigate the Future

What changes are builders most likely to implement in the next few years?

Change in the Air: How Builders Plan to Navigate the Future

It’s very rewarding being a construction marketing researcher. I truly enjoy tracking, measuring, and predicting changes within the construction industry. But what I enjoy even more is helping our clients continue to reshape their businesses and product offerings to ensure they are providing the greatest value to their customers. This work requires regular interaction with builders and remodelers, keeping our “finger on the pulse” of the industry through interviews, focus groups, surveys, and jobsite observation. We listen and learn about their purchasing behaviors, problems at the office and jobsite, and the solutions they need or opportunities they are seeing.

In the last half of 2021, Home Innovation queried more than 350 owners and senior managers of home building companies in our Omnibus Survey about how they envision the future of their businesses. With all that changed in the industry and related markets in the wake of the COVID pandemic, many of these building professionals have said they are stressed to an uncomfortable level and are making big changes to their companies. Within the survey, we posed the following question:

What are the biggest changes your home building business will make in the coming few years. Why are you making these changes? Please explain.

We then left an unprompted, blank space for builders to write what was on their minds. Their responses were predictably varied and rich in content, and provide a telling snapshot of what’s in store for the future of this industry. Below is my attempt to organize and quantify these highly varied responses by major themes.

TOP TIER (13 to 59 mentions)

Solving labor issues was by far the most-mentioned business directional change, but approaches differed builder-by-builder. Some are adopting efforts to find new workers; others are focused on training programs. Others are working to streamline the work process to accommodate fewer, or lower-skilled, workers. Others are working to attract the next generation of workers.

While generally related to labor availability, the second-most mentioned topic was adopting or extending the use of off-site construction processes. Panelization was the most commonly-mentioned change, followed by modular. Some stated seeking whole-house off-site solutions, and some said they’re looking for more targeted, partial solutions ranging from rough framing to finishes — e.g., prefabricated porches, floors, stairways, etc. Anything that will shift work from the jobsite and to the factory.

The third-most mentioned topic was energy efficiency — poses a big challenge in meeting more stringent building code requirements while still maintaining affordability.

The fourth response was somewhat expected – those who said no business changes were underway. After all, many builders have spent their careers perfecting their building operations; for them, it doesn’t make sense to “rock the boat” with the tried-and-true practices at a time when so many other variables are in flux. Some sample responses in this category included, “I don't foresee any big changes in how we do things. It works for us;” and “I do not need to make any changes to my business. I will only make changes if the world goes completely to crap!”

In the number five and six spots were comments that related to cost control — one specific to materials prices, and another related to construction costs in general – each with 7% of responding builders mentioning them. Responses in these categories included building smaller homes with fewer features and looking for less expensive materials or more efficient construction processes.

The seventh spot was occupied by what we categorized as, “Measures to ensure stable materials supply.” This includes responses related to having more suppliers, more acceptable materials options to prevent delays, and even warehousing some critical materials.

MIDDLE TIER (5 to 9 mentions)

The next tier of responses included those topics that were mentioned 5 to 9 times by the builders surveyed. While not top-of-mind for the majority of respondents, these topics provide some insight into issues that may be lying just under the surface for builders. Changing markets, new building codes, construction efficiency, and home quality were reported included in these groupings.

HONORABLE MENTIONS (3 or 4 mentions)

The last tier I refer to as our “Honorable Mentions” – the topics that were mentioned by 3 or 4 of the 358 builders participating. Like the middle tier, these represent some broader themes that are not high on builder lists of issues or concerns, but are worth tracking to see if or how they develop.

Materials pricing variability and economic uncertainty are giving at least some builders reason to re-think how they operate their businesses, such as adopting a build-for-sale strategy or on a cost-plus basis. Others of these response topics, such as, “Build for higher end / custom markets,” seem to be a local or personal aspiration.

As I noted, the findings of this study are very rich and varied. This short post does not convey the depth of insight available from reviewing all the builder responses to the question. If you’d like to see the full set responses, get in touch – I’ll be sure to get you a copy. We can also discuss the ways survey data like these and the reports generated from our Annual Builder and Consumer Practices Surveys can help your company survive and thrive in these changing times.