What’s ahead for homebuilding? One good source for information is Dr. Robert Dietz, chief economist for the National Association of Home Builders (NAHB), who shared his outlook at the Housing Forecast Breakfast in late summer during the Carolina Builders Conference in Charlotte.
From mortgage rates and construction costs to building permits across North Carolina, Dietz covered several trends shaping the housing market. As we head into fall, here are five takeaways for builders, homeowners, and prospective buyers in Western North Carolina.
1. The Housing Shortage Is Narrowing, but Challenges Remain
The country needs about 1.2 million more homes to meet demand, according to NAHB. Dietz’s presentation projects that gap will close by 2030, but builders still face hurdles to getting more homes built.
Dietz pointed to five challenges in particular: labor, land, lending, lumber and materials, and legal and regulatory costs. From finding workers to securing financing, these challenges are closely connected. Making progress will take more than a single fix.
Here in Western North Carolina, that means addressing the shortage of buildable lots, encouraging careers in the skilled trades, and helping builders access construction loans. Each can help bring more homes to market.
2. Mortgage Rates Are Likely to Keep Hurting Affordability
For many prospective buyers, the question isn’t just what a home costs. It’s what the monthly payment will look like.
Dietz’s forecast showed mortgage rates staying above 6 percent, with inflation leaving little room for relief. NAHB also expected no additional Federal Reserve rate cuts for the rest of 2026.
That means putting more homes on the market won’t necessarily make buying one easier. For builders, choices about a home’s size, design, and materials can help keep prices within reach.
3. Regulatory Costs Are a Significant Part of a New Home’s Price
According to NAHB, regulatory costs like zoning approvals, fees, and required studies account for an estimated $131,734 per new home nationally, or 26.4 percent of its price. That represents a 40 percent increase from 2021 to 2026.
Making homes more affordable means looking at the rules and approvals that add to building costs. NAHB recommends simpler permitting, updated zoning rules, and reasonable, cost-effective building codes.
4. Asheville’s Single-Family Permitting Decline Is Smaller Than the State’s
Through July 2026, the Asheville metro area issued 2 percent fewer permits for single-family homes than during the same period in 2025. Across North Carolina, permits fell 8 percent.
The takeaway? Permit activity declined both locally and statewide, but Asheville’s drop was much smaller. That suggests plans for new single-family homes held steadier here than across the state overall.
5. Remodeling Remains an Important Part of the Market
Even as new home construction slows, many people continue to renovate their existing homes. Some need room for a growing family. Others want to adapt their home to age in place. Together, those projects help keep local contractors, suppliers, and skilled tradespeople busy.
After accounting for inflation, NAHB expected remodeling spending to hold steady in 2026. Growth is expected to follow, with spending projected to rise 2 percent each year in 2027 and 2028.
Looking Ahead
There’s reason for optimism in Dietz’s forecast, but plenty of challenges remain. The housing shortage is improving, but higher borrowing costs and construction expenses continue to make it tough to build or buy.
Here in Western North Carolina, progress will take continued focus on several fronts, from training more tradespeople to making financing and permitting easier to navigate. Keeping an eye on local trends can help builders and community leaders make smart choices about the region’s housing future.
