Custom Builds in 2025: The Future of Home Construction in Cincinnati

Will 2025 be the year you build your dream custom-built home? Before you commit to that decision, take a look at the home construction forecast for the coming 12 months. This look ahead will tell you what to expect in terms of costs, contractor availability, and the overall market for home builds.

Home Construction and the Housing Shortage Crisis in 2025

Some market experts will tell you there is a housing crisis across the United States, while others will claim this is a myth. Which claim does the data support?

A recent survey from The Pew Charitable Trusts shows a shortage of four to seven million homes in the current market. The survey’s results support the existence of a housing crisis in Cincinnati and throughout the country. That may be good news for home builders — and for those interested in building their dream homes.

Adding to the situation is the hike in rent prices that has resulted from an abnormally high rate of inflation. Almost half of renters in the United States spend at least 30% of their income on housing. Some severely cost-burdened renters have to use half of their money for this single expense. 

As renters face massive rent hikes, they’re looking for alternatives that will allow them to spend less on housing. Instead of continuing to pay inflated rent to a property owner and getting nothing in return, they are looking for homes of their own. 

While this situation adds to the housing shortage crisis, it might bring hope to the home construction industry. Whether buying a resale home or building a custom home, many people would rather invest in property that will grow equity over time. 

Factors Affecting Cincinnati’s Home Construction Market

Several factors may affect home construction in Cincinnati and the surrounding region. These factors will influence the number of homebuyers looking for new or resale properties.

Rising Job Growth

Experts predict that Cincinnati’s employment rate will remain steady in the coming year. Analysts also expect the city to experience consistent job growth, continuing a trend of economic growth that has positively impacted the city over the past several years. More jobs will bring a need for housing that’s both affordable and consistently available.

Population Expansion

On average, Ohio has a lower cost of living than the surrounding states. As word of this advantage spreads, those seeking economic relief may relocate to the state. 

Combined with regular job growth, Cincinnati’s lower cost of living offers great opportunities for transplanted residents. An influx of newcomers to the area could increase demand for housing over the next 12 months.

Lower Interest Rates

Recent years have brought rising interest rates that chased potential buyers away from the market. As rates level off, some buyers will return to the market in search of starter homes. 

In addition, some financial analysts predict a decrease in interest rates as a different presidential administration takes office. This may inspire those budgeting for new home construction to make 2025 the year they start their home builds.

Low Inventories

While more buyers entering the market indicate a positive turn, it’s just as important to look at the opposite side of the equation. A low inventory of homes has created a housing crisis and forced buyers out of the market. The few homes that are available come with hefty price tags that many buyers can’t afford. 

Custom Home Building in 2025?

In 2024, the Cincinnati housing market experienced stronger buyer demand coupled with higher home prices. This led to faster home sales and property values rising by 5.3% over the previous year. That trend should continue throughout 2025, resulting in a market that’s more active than it has been through the 2023 and 2024 seasons.

Several factors will affect the home construction industry through this time. Consistent job growth, an expanding population, and lower interest rates will encourage more working adults to enter the market. This will add more demand to a market that already has a housing shortage, which makes it important to increase the inventory of available properties.

Affordability and scarcity may remain a concern for homebuyers when searching for homes that fit their needs. This may prompt some to consider new construction homes. Whether looking for energy-efficient custom homes or high-quality homes with sufficient square footage, more buyers might consider the benefits of building a new home.

While there are programs that help low-income families buy homes, many middle-class buyers feel left out. Construction contractors have been adapting to this obstacle by offering new homes that remain affordable for the middle class. 

By designing and constructing homes at affordable prices, builders can alleviate the housing crisis and remain active with upcoming projects.

Designing Your Dream Home Is Easy

John Henry Homes is an experienced and trusted custom builder in the Cincinnati area. We make it easy to design your dream home by offering floor plans that you can customize to suit your needs. Alternatively, choose one of our finished homes to skip the construction process. Contact us to discuss your building or homebuying plans today!