Residential construction and building materials: End of 2023 outlook

The first half of 2023 has presented unique and significant challenges to companies within the residential real estate value chain. Price increases continue to move down the value chain, pressuring profit margins. At the same time, demand has weakened as mortgage rates continue to reach decade highs. Mitigating profit loss will require agile responses from companies, and Simon-Kucher Construction & Building Materials experts Will Humsi and Tom McClure lay out three immediate actions companies should consider as they navigate the current and near-term market environment.

Challenge #1: National trends don’t paint the full picture

While national headlines continue to tout doom and gloom in the construction sector, the hard data paints a clearer picture of what can be expected in the near future. Yes, the existing homes market has cooled as current homeowners are reluctant to give up their locked-in mortgage rates. However, May 2023 sales of newly…