High interest rates and a slowdown in new home construction can feel like a setback for building product manufacturers. However, these economic shifts often present new opportunities for companies that are prepared to adapt. By understanding how demand patterns change during these times, manufacturers can reposition themselves to thrive, not just survive, until the housing market rebounds.
Understanding the Current Housing Market
The 2025 housing market is being shaped by two major factors: persistently high interest rates and ongoing tariff uncertainties. Mortgage rates remain elevated, which has significantly increased the cost of homeownership. As a result, many potential buyers are delaying purchases of new homes, leading to a slowdown in new home construction.
NAHB chief economist Robert Dietz recently stated, “Right now, we are expecting single-family housing starts to be down about 5 percent in 2025. That’s a contrast from the beginning of the year, when we expected starts to be flat.”
While new home construction has remained flat, many of those buyers are considering home renovations instead.
At the same time, uncertainty about tariffs on imported materials has caused fluctuations in costs for lumber, metals, and other key building supplies. Many manufacturers have been forced to purchase materials earlier than usual to avoid potential price hikes, while others have reduced overseas purchases altogether. These factors combined have created tighter margins and production planning challenges for building product manufacturers.
While these trends present challenges, they also open the door to new strategies that can help manufacturers stay competitive and profitable despite a slower housing market.
Homeowners Turn to Renovations Instead of New Builds
When people can’t or don’t want to buy new homes, they often decide to improve the ones they already have. Renovation and remodeling spending typically grows during high-interest-rate periods.
Homeowners may choose to:
- Replace old windows and doors with more energy-efficient options.
- Update kitchens with new cabinets, countertops, and flooring.
- Build home offices, outdoor living spaces, or additions that make existing homes feel new.
For manufacturers of cabinets, windows, doors, countertops, flooring, and related building products, this shift can help balance slower demand for new construction materials. Companies that can respond quickly with customizable, made-to-order solutions are well-positioned to benefit from the renovation boom.
Growth in Multi-Family and Commercial Construction
While single-family home construction may slow down, the demand for rental properties often increases as fewer people buy homes. This trend drives growth in single-family rental renovations and multi-family housing projects like apartments, townhomes, and condos.
Commercial developments may also continue, particularly in areas experiencing population growth. For building product manufacturers, this creates a chance to supply large-scale projects that require consistent quality and on-time delivery. Manufacturers with the right technology to manage complex orders and coordinate with contractors can secure valuable long-term relationships with developers.
Strengthening Dealer and Contractor Relationships
When the market is busy, manufacturers often focus solely on production and fulfillment. A slower period gives companies a chance to step back and invest in relationships.
- Dealers and distributors: Improve quoting and ordering processes so they can serve customers more efficiently.
- Contractors: Provide better visibility into product lead times and availability.
- Showrooms: Offer tools that make it easier for customers to configure and price custom products.
Frontier’s eQuote Dealer offers building product manufacturers real-time product configurations for instant 3D renderings before the order is placed.
Building loyalty during a slower market helps manufacturers secure repeat business when demand increases. Companies that make it easier for dealers and contractors to sell their products will be the first choice when construction picks up again.
Strategic Marketing and Customer Outreach
Even in a slow housing market, effective marketing keeps building product manufacturers visible and relevant. Using digital platforms like social media, email, and SEO, manufacturers can share valuable content, blog posts, videos, and case studies that showcase expertise and solutions.
Regular outreach to dealers and contractors with updates, promotions, and training strengthens relationships and builds loyalty. These efforts generate leads and position manufacturers for growth when the market rebounds. Investing in strategic marketing now expands brand awareness and reach, setting the stage for future success.
A Window for Product Innovation
Periods of lower demand can also be an ideal time to focus on research and development. Manufacturers can take advantage of the slower pace to:
- Expand product lines to meet emerging design trends.
- Develop more sustainable or energy-efficient options.
- Improve customization options through better product configuration.
Innovating now positions companies to capture new customers once the housing market strengthens. Products that meet consumer demands for sustainability, smart-home integration, or universal design will stand out in the future market.
Less Competitive Material Markets
When fewer new homes are being built, the competition for raw materials often decreases. For manufacturers, this may mean:
- Lower material prices or at least more predictable supply costs.
- Improved supply chain reliability, reducing lead times and production delays.
These benefits can help building product manufacturers maintain healthy margins and consistent operations, even during a slower sales period.
Positioning for Long-Term Success With the Right Tools
During the slow housing market, manufacturers can focus on new product development and continuous improvement measures for better operational efficiency.
The most important opportunity during a slump is building the foundation for future growth. When interest rates eventually fall and new home construction rebounds, manufacturers that have streamlined their operations will be ready to scale faster than their competitors.
This is where Frontier ERP makes the difference. Frontier ERP helps building product manufacturers:
- Simplify complex quoting and ordering with built-in CPQ (Configure, Price, Quote) tools.
- Gain real-time visibility into inventory, order status, and production schedules.
- Improve efficiency across departments with a single, centralized database that eliminates silos.
- Support dealer and contractor networks with easy-to-use dealer portals and quoting solutions.
- Analyze your customer base, buying patterns, and build locations to determine a strategic target market.
- Reduce errors and lead times with automated workflows from sales to production to shipping.
By implementing Frontier ERP during a slower period, manufacturers can tackle inefficiencies, improve customer support, and prepare for increased demand. When the housing market rebounds, companies using Frontier will already have the systems in place to fulfill orders faster, minimize production errors, and maximize profitability.
Turning a Slump Into a Strategic Advantage
High interest rates, tariff uncertainties, and slower new home construction don’t have to mean a downturn for building product manufacturers. By shifting focus to renovations, strengthening partnerships, and improving internal processes, companies can turn today’s challenges into tomorrow’s growth opportunities.
With Frontier ERP, you gain the tools to not just weather the storm but thrive when the market returns. The manufacturers who use this time to streamline operations and invest in the right technology will be the ones leading the industry when the housing market takes off again.
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