Mid‑year 2026 brings the latest forecasts from the American Institute of Architects (AIA) and the National Association of Home Builders (NAHB), both showing modest outlooks for construction activity.
Nonresidential and Residential Projections
The AIA’s Consensus Construction Forecast, released July 20, estimates total nonresidential construction at $846 billion. It also notes a 3 % rise in inquiries about new work during June, reflecting the “uptick in quotes” that many architects have reported.
NAHB’s data shows a mixed picture for housing. New single‑family construction is projected at about 895,000 SAR units, a 3.2 % decline year‑over‑year in June. Multifamily housing, however, rebounded strongly, with a seasonally adjusted forecast of 532,000 units for 2026 and a 17 % year‑over‑year increase in June.
Overall, NAHB expects roughly 1.43 million new residential units this year, with no anticipated drop in interest rates despite the Federal Reserve’s ongoing battle with inflation above 2 %.
Sector‑Specific Drivers and Headwinds
High‑end segments—custom single‑family homes, restoration projects, adaptive reuse, and institutional nonresidential work—remain the most buoyant. An aging demographic with significant equity and strong stock market returns fuels demand for these specialized services.
Material costs are under pressure. The AIA cites an ABI score of 47.3, indicating that rising oil prices are likely to lift construction material prices by 4‑5 % three months after a 10 % increase in Brent Crude. Oil surged 54 % in April, 66 % in May, and 36 % in June compared with the previous year.
Labor shortages affect the industry broadly, but firms with long‑standing client relationships and skilled crews report less impact.
The Harvard Joint Center for Housing Studies’ Remodeling Futures Program projects $519 billion in remodeling and renovation spending for 2027, indicating the sector’s continued strength.
While the broader economy appears to be “treading water,” the niche of traditional building trades—particularly firms serving generational estates, private schools, churches, and boutique hotels—remains relatively resilient.
Outlook for Builders and Architects
Builders and architects who specialize in high‑end renovations and adaptive reuse report being “busy,” though the nature of that busyness varies. Some see increased quoting activity, while others note a rise in actual construction work.
Data‑center construction tied to artificial intelligence continues to offer rapid profit opportunities, but it remains a niche outside the typical portfolio of most readers.
Overall, the forecasts suggest modest growth in nonresidential construction and a steady, if uneven, residential market. Firms that leverage established client networks and maintain skilled labor forces appear best positioned to manage the current mix of opportunities and material‑cost pressures.
