2025 is already proving to be a year of change for the housing market. At the New Home Trends Institute’s annual webinar, hosted by John Burns Research and Consulting, industry leaders explored “25 Trends for 2025” — a collection of emerging forces and trends poised to shape the market in the year ahead. The discussions, rich with data-driven insights and forward-looking predictions, highlighted how homebuyers are prioritizing affordability, alongside long-term value, energy efficiency and smart-living features.

Here are eight standout trends that caught my attention and are set to drive change in 2025.

1. Affordable Approaches to Making Homeownership More Attainable

In a market where rising home prices are a constant challenge, builders and developers are under increasing pressure to find creative ways to offer homes that are not only functional but also affordable. One effective strategy is high-density design, which emphasizes smaller lots and efficient layouts without sacrificing livability. Think townhomes, cottages and cluster homes — each optimized to maximize space while reducing the overall cost.

“Community developers are focused on addressing affordability with smaller lots and more rental,” said Ken Perlman, managing principal at John Burns Research and Consulting. “80% of developers we recently surveyed reported that they are making adjustments to increase affordability.”

While downsizing may seem like a trade-off, today’s buyers are increasingly prioritizing functionality and smart design over sheer square footage. Features such as flexible floor plans, multiuse spaces and more efficient designs for communal areas are helping make homes more affordable while still meeting the desires of homebuyers.

2. Townhomes Are Making a Comeback

With land becoming scarcer and prices climbing, townhomes, once primarily a feature of urban environments, are expected to make a major comeback in 2025, especially in suburban markets. But the townhome of today is far from the outdated, cramped design many may remember. Today’s models are spacious, high end and energy efficient, featuring modern finishes and innovative layouts.

Whether for young professionals, downsizing empty-nesters or families seeking an alternative to sprawling suburban estates, townhomes are positioning themselves as a middle ground — offering the best of both worlds: proximity to urban centers and the appeal of suburban living.

3. Quality Materials for Less

Affordability has remained a persistent challenge for homebuyers, yet there is still a strong demand for high-quality products at lower price points. In response, builders are introducing value-priced alternatives that maintain quality without the premium price tag.

“We’ve heard many instances of consumers trading down to product quality due to the high cost of building materials, which aggregates up 40% over 2019 levels due to rising material and labor costs,” said Chris Beard, vice president of building products research for John Burns Research and Consulting. “We’ve also started to see companies come out with value price point products to still capture a willing consumer yet at a lower overall price point.”

One key shift is the rise of “entry” entry-level products, designed to offer consumers move-up features without the move-up cost. For example, materials such as composite decking, once considered a premium option, are being priced more competitively, making them accessible to a wider range of buyers.

This trend reflects a broader shift in the industry, where the challenge is to not just build affordable homes but also incorporate durable, high-quality materials that enhance long-term value without inflating costs. By leveraging innovative, cost-conscious solutions, homebuilders can meet the demand for quality while ensuring homes remain within reach for first-time buyers and those looking to move up.

4. Builders Who Move Fast Have the Edge

With the ongoing labor shortage and growing demand for housing, there’s a pressing need for innovations that streamline construction and reduce time-to-market. Developers are turning to innovative building technologies to streamline the construction process and reduce build times. Whether through prefabricated materials, modular systems or advanced framing techniques, the goal is clear: deliver homes faster, without sacrificing quality.

“According to our monthly builders survey, homebuilders are expecting to start 11% more single-family homes next year over 2024 — further straining an already tight labor market,” Beard said.

Speed-focused solutions are proving particularly valuable in addressing the housing shortage. Tools such as easy-install windows and quick-assemble systems are allowing builders to expedite projects while managing costs and labor shortages. Builders who can deliver homes quickly will have a distinct advantage in a market where time is of the essence.

5. Master Plan Communities Are Becoming More Connected

Master plan communities have long been the hallmark of suburban development, but as buyer preferences evolve, so too are the designs of these neighborhoods. The traditional model of sprawling, isolated developments is being replaced by a more flexible, community-oriented approach.

Today’s MPCs are created with an emphasis on walkability, sustainability and health. Developers are incorporating wellness-focused amenities such as green spaces, walking trails, coworking spaces and outdoor fitness zones to create vibrant, interconnected communities. Buyers are increasingly seeking neighborhoods where they can live, work and play, all within a short walk from their doorstep.

This shift toward smaller, more cohesive developments that foster social connectivity and sustainability reflects a broader desire for a more holistic, community-centered way of life.