real-estate – Xtreme Builders LLC

As of mid-2025, many prospective homebuyers are puzzled: with a noticeable increase in housing inventory, why aren’t home prices dropping significantly? While the seller-to-buyer ratio offers a snapshot of market sentiment, it doesn’t capture the full complexity of the housing market ¹. Let’s explore the underlying factors keeping prices elevated.

📊 The Seller-to-Buyer Ratio: A Limited Indicator

The seller-to-buyer ratio provides a general sense of market balance. A higher ratio suggests a buyer’s market, while a lower ratio indicates a seller’s market. However, this metric doesn’t account for crucial elements like:

Price Sensitivity: An abundance of buyers doesn’t guarantee sales if homes are overpriced.
Property Types: Demand varies across different housing segments; for instance, entry-level homes may see more interest than luxury properties.
Construction Costs: Rising costs can deter new developments, affecting supply.

Therefore, while informative, the seller-to-buyer ratio shouldn’t be the sole measure of market health.

🧱 Construction Costs: A Major Contributor

Construction expenses have surged, making it costlier to build new homes. In 2024, construction costs accounted for approximately 64.4% of a single-family home’s price—the highest since the 1990s. The average construction cost reached $428,215, or $162 per square foot ². Factors driving these costs include ³:

Material Prices: Tariffs and supply chain disruptions have increased prices for essential materials like steel and aluminum .
Labor Shortages: The industry faces a deficit of skilled workers, leading to higher wages and project delays ⁴ ⁵.

These rising costs discourage new construction, limiting housing supply and sustaining high prices ⁶.

🏗️ Supply Constraints Amid Rising Demand

Despite a slowdown in construction, demand for housing remains robust. In April 2025, U.S. construction spending fell by 0.4%, with residential construction dropping by 0.9% . High borrowing costs and an oversupply of unsold homes have contributed to this decline ⁷. However, the existing housing inventory is still below historical averages, and new home listings have surged to the highest level in five years, offering buyers more options ⁸.

💸 Mortgage Rates and Affordability

Mortgage rates have remained elevated, averaging 6.89% for a 30-year fixed-rate loan ⁹. These higher rates have strained affordability, particularly for first-time buyers. While some regions have seen slight price declines, overall home prices have continued to rise, albeit at a slower pace. In March 2025, the S&P CoreLogic Case-Shiller national home price index reported a 0.3% drop from February, but prices were still 3.4% higher than a year ago ¹⁰.

🏘️ Regional Variations and Market Outlook

Real estate markets vary significantly across regions ¹¹. For example:

Sun Belt States: Areas like Texas, Florida, and Arizona are experiencing strong housing activity due to robust construction and offerings for first-time buyers .
Northeast: Supply constraints and high land costs have limited new construction, keeping prices elevated.

Looking ahead, J.P. Morgan Research anticipates a modest 3% increase in home prices for 2025, with mortgage rates expected to ease slightly to 6.7% by year-end ¹².

🧠 Conclusion

While the seller-to-buyer ratio provides a glimpse into market dynamics, it’s insufficient to fully understand the complexities of the housing market. Rising construction costs, supply constraints, and high mortgage rates are significant factors keeping home prices from falling. As these challenges persist, it’s crucial for buyers, sellers, and policymakers to consider a broader range of indicators when assessing market conditions.

Recent Developments in the Housing Market

US construction spending falls in April on weakness in single-family housing projects

3 reasons it’s a great time to buy a home, according to Compass’ CEO

Just in Time for Spring, a Slight Decline in Home Prices

“Through wisdom is an house builded; and by understanding it is established: and by knowledge shall the chambers be filled with all precious and pleasant riches.” Proverbs 24:3-4 (KJV)

When you start a construction project, the excitement is often paired with one major concern: How long is this going to take? At Xtreme Builders LLC, we’ve had countless conversations with clients who are eager to see their vision come to life but are understandably worried about potential delays and cost overruns. Timelines matter because time, in construction, is money—and more importantly, it’s your home or project at stake.

Let’s break down the stages of a typical project so you can understand how we approach timelines and why careful planning is key to a smooth build.

1. Pre-Construction (Planning and Design)

This is where it all begins. We start with an in-depth consultation to discuss your needs, wants, and ideas. From there, we work on creating blueprints that reflect your vision while adhering to structural and legal requirements. We also handle permits during this phase—often the part that takes the most time but is crucial for keeping everything above board. Thorough preparation at this stage prevents many potential delays later, and with the help of our design and build software, we can move efficiently through the process.

2. Breaking Ground (Site Preparation and Foundation)

Next, we prepare the site by clearing and leveling the land. Excavation begins, and we lay the foundation—the literal and figurative cornerstone of your entire project. This phase is all about precision; if the foundation isn’t perfect, nothing else will be. Depending on the size and complexity of your project, this can take a week or two, but it sets the stage for everything to follow.

3. Structural Work (Framing, Roofing, and Exterior)

Here’s where your dream starts to take shape. Framing is the process of building the skeleton of your home, followed by roofing and exterior work. At this point, you’ll finally start seeing real progress as walls go up and spaces start to form. For a mid-sized project, this stage usually takes a few weeks to a month, but it can extend depending on the size and materials chosen. Using our integrated software, we manage this phase with a close eye on detail and efficiency, ensuring we hit our targets.

4. Interior Finishing (Plumbing, Electrical, and Drywall)

Behind the scenes, a lot is happening as tradespeople coordinate to install plumbing, electrical systems, HVAC, and drywall. This part of the process requires seamless coordination between different trades to avoid overlap and delays. Timing is crucial here because if one trade falls behind, it can affect everyone else. We use advanced scheduling tools to keep everyone on track, ensuring that this stage progresses smoothly.

5. Final Inspection and Walkthrough

After months of hard work, we’re in the final stages. We conduct thorough inspections to ensure everything is up to code, safe, and functioning properly. Once we’ve checked everything, we invite you to do a walkthrough of your project, ensuring that it meets your expectations down to the last detail.

Conclusion

At Xtreme Builders LLC, we know that sticking to a timeline is about more than just deadlines—it’s about trust and delivering on promises. Our use of cutting-edge technology allows us to work efficiently, providing cost-effective solutions without sacrificing quality. With proper planning, clear communication, and a focus on every detail, we ensure that your project moves from blueprint to build as smoothly as possible.

If you’re ready to build, we’re here to turn your vision into reality, on time and within budget.