Affordable Housing Trends for 2025: What Developers Need to Know
Over the last few years, the housing market has faced challenges. Rising interest rates, increased home prices, and, despite a demand for housing, affordability concerns have slowed real estate development.
Yet things change and the new year shows promise in providing new potential for developers looking to build affordable housing.
Trends in Affordable Housing Development
The trend towards affordable housing has been emerging for some time and looks to broaden even more in 2025. The incipient administration and public sentiment both highlight the need and demand for more affordable housing options.
Expect this trend to continue in 2025 with administrative efforts taking place to create even greater opportunities to supply the need for affordable housing through tax breaks, subsidies, and other assistance programs.
The Use Of Government Land and Decreased Costs
The incoming Trump administration has claimed to ease the affordability burdens of housing by utilizing government lands to decrease development costs. Should this come to pass, it could be part of an administrative promise towards making affordable housing more accessible and developer-friendly.
Decreased Interest Rates
The U.S. Federal Reserve decreased the interest rate for a second time this year with plans to decrease it further before the year ends and provide additional interest rate decreases in 2025.
With two decreases already accomplished at a greater anticipated rate, the Fed may provide relief to not only millions of Americans but also to the real estate industry, supplying a boon to development efforts.
The Rise of Multifamily Housing Properties
While affordable housing comes in many construction varieties, multifamily housing properties offer both an economical and space-efficient way to give housing access to many.
According to the Census Bureau’s Survey of Construction, multifamily housing units are being constructed at a rate of 671,000 per year. This is the highest number seen since 1987 and is projected to grow in 2025.
The creation of these affordable housing units has been aided through private-public partnerships, an affordable housing strategy that looks to continue strongly in 2025.
Emerging Technologies Boost Affordable Housing Viability
New, innovative technologies can positively affect materials cost, labor expenditure, build time, and other development needs.
3D printing and modular materials can boost the efficiency of affordable housing development. Though currently, initial costs and regulatory roadblocks may prevent the implementation of these technologies, decreasing costs for printers and changing regulations may make these emerging technologies viable options for developers looking to build affordable housing.
Get Ready for the Future of Affordable Housing
No matter where 2025 takes real estate development for affordable housing, rest assured that Hestia Housing Company will be there as ready ever with a team of real estate and finance leaders who have been delivering investment success and driving a more equitable society.