As we step into 2025, housing starts remain one of the most important indicators of material demand in the construction supply chain. While the past few years have brought volatility — from interest rate hikes to supply chain disruption — housing activity continues to serve as a critical signal for distributors looking to forecast sales, manage inventory, and align with customer needs.
But the connection between housing starts and material demand is becoming more nuanced. In today’s market, the volume, type, and timing of housing starts all play a role in shaping what materials are needed — and when.
Here’s what to expect in 2025 when it comes to how housing activity will influence demand across the building materials industry.
1. Stabilization in Housing Starts Will Bring Predictable Demand Cycles
After a turbulent few years, 2025 is expected to bring greater consistency in new residential construction activity — especially in key growth markets.
What to Expect:
National housing starts projected to see modest growth or plateau
Builders will focus on clearing backlogs and launching previously delayed projects
Demand will follow a more seasonal and forecastable pattern
Why It Matters:
Distributors will benefit from more predictable material ordering cycles, enabling better procurement planning and inventory control.
2. Regional Divergence Will Continue to Shape Local Demand
Not all markets are moving at the same pace. Sun Belt, Mountain West, and suburban Southeast regions are expected to drive a significant portion of new housing activity in 2025.
What to Expect:
High-growth metros will see stronger demand for framing, roofing, and MEP rough-ins
Urban infill and ADU (accessory dwelling unit) projects may rise in mature markets
Builders will scale operations in markets with favorable permitting and land costs
Why It Matters:
Distributors must align branch-level inventory and staffing with local housing trends — not just national forecasts.
3. Affordability Will Influence the Type of Housing — and the Materials Used
Affordability challenges and buyer preference shifts are pushing builders toward smaller homes, townhomes, and entry-level units.
What to Expect:
Increased demand for cost-effective framing, siding, and finish materials
Emphasis on value-engineered components and prefabricated assemblies
Less emphasis on high-end customization and more focus on scalability
Why It Matters:
Stocking the right SKU mix and product tiers will be critical to serving today’s builder priorities.
4. Build-to-Rent Activity Will Drive Volume-Based Material Demand
The build-to-rent (BTR) segment continues to grow as institutional investors target long-term rental income. BTR communities often prioritize repeatable designs and fast turnaround — changing how materials are purchased.
What to Expect:
Bulk buying of standard-grade materials across multiple units
Greater reliance on structured deliveries and jobsite logistics
Increased interest in vendor-managed inventory and order staging
Why It Matters:
Distributors that support BTR developers with logistics coordination and scalable fulfillment will gain long-term partnerships.
5. Longer Lead Times From Starts to Completions Will Spread Demand Over Time
Even when housing starts increase, completions — and the related demand for certain materials — may be delayed due to labor shortages and permitting issues.
What to Expect:
Staggered material needs across phases (foundation, framing, finish)
Increased emphasis on phase-based ordering and project coordination
Delays in interior material demand even as framing and exterior picks up
Why It Matters:
Forecasting must be project-phase aware, not just based on start volume alone.
6. Material Demand Will Be Heavily Influenced by Financing Conditions
With interest rates expected to remain elevated in early 2025, financing constraints may lead to more phased projects and smaller batch starts, especially among private builders.
What to Expect:
Reduced demand spikes, more even material flow
Emphasis on product availability and price stability
Preference for suppliers that can support flexible delivery schedules
Why It Matters:
Distributors must offer financial predictability and logistical agility to win business in uncertain times.
7. Remodeling and Infill Will Continue to Supplement New Construction
In areas where housing starts remain limited, remodeling, ADUs, and small-scale residential expansions will continue to drive steady material demand.
What to Expect:
Increased sales in categories like windows, insulation, drywall, and trim
Preference for flexible order sizes and fast turnaround
Strong relationships with remodelers and general contractors
Why It Matters:
A diversified contractor base helps balance fluctuations in large housing start activity.
Conclusion
As 2025 unfolds, housing starts will remain a key — but not the only — predictor of material demand. Distributors who combine starts data with regional insight, project phasing awareness, and customer engagement will be best positioned to capture market share and reduce inventory risk.
The smartest players won’t just react to housing starts — they’ll use them as a foundation for proactive planning, smarter stocking, and stronger customer support.
