As 2024 comes to a close, LBM dealers are facing transformative trends in the housing market, construction economics, and product innovations in 2025. Many issues remain undetermined, but a few trends, including labor, are business as usual. Here’s a look at some of the product and economic trends that may shape business for LBM dealers in 2025 and affect customer decisions in the near future.
Housing Market and Economic Trends Heading into 2025
Uncertainty begins with the volatile housing market, which is still dealing with high interest rates, affordability concerns, and low inventory.
Planned economic policies from incoming President Donald Trump could have direct impacts—positive and negative, according to various reports—on the housing market and dealer supply. Immigration and tariffs are two areas in particular that the industry is keeping a close eye on.
“Although Trump’s proposals to cut red tape and regulations for homebuilders could help boost construction on the margins, housing economists warn that other of his proposals could hamper supply,” Keith Griffith wrote in Realtor.com’s post-election analysis. In addition, “The housing crisis in America is more than a decade in the making. Construction plunged following the Great Recession and hasn’t yet fully recovered, leaving the nation in a deep hole of undersupply. Quick and easy fixes are unlikely to emerge.”
Indeed, “Both the Republicans and the Democrats will have proposals that will sound good on paper, but do very little to change the housing shortage, unfortunately,” Ken Johnson, a professor of finance and the Walker Chair of Real Estate at the University of Mississippi, told Realtor.com.
The ongoing labor shortages in the construction industry likely will remain a critical challenge for LBM dealers in 2025. “The workforce situation is not getting better,” says Mike Berger editor of LBM Journal. “It’s going to take time before we’ll be back to reasonable levels.”
Craig Webb, LBM consultant and publisher of Webb Analytics, says dealers may feel the effects from the new administration’s policies if they employ immigrants in their truss facilities.
“The biggest concern for dealers is certainly the general economy,” said David Koenig, editor of Building Products Digest and The Merchant. “It’s not just how much money their customers have to spend—just as important is how customers feel about spending that money. Do they feel like it’s a good time to change the look of their home in a significant way? This is doubly important in that, with rising housing prices having placed ownership out of reach for so many, the balance of demand will tip once again to repair and remodeling.”
Koenig suggests that dealers pay close attention to their local community and local economic conditions, then adjust product buying volume and mix accordingly.
Top Residential Building Product Trends for 2025
Economic trends and current events aren’t just shaping how you run your business, but also what you sell. A few things to consider when evaluating your inventory include:
• Easier Installation: The labor shortage among contractors has them seeking products that allow them to work faster or use fewer people, Berger says. In addition, customers are seeking products that are part of a complete solution. “They’re looking for anything that makes their lives easier when it comes to ordering and product choice.”
• Outdoor Living: Homeowner demand for outdoor living spaces continues unabated, but it is shifting a bit, Berger says. “People really became attuned to what was possible in their own yards, and they’re still spending,” he explains “But they’re being thoughtful about it. They’re looking for products that are not just functional, but have an elevated aesthetic. They want a product that isn’t just a structure or a feature … but will set their home apart and give it visual appeal.”
Premium Decking in Weathered Gray and Chesnut• Low-Maintenance Materials: “There’s still a sense of lack of time on the homeowners’ part,” Berger notes. “They want outdoor living, but they don’t want to be hamstrung by the maintenance that their outdoor living takes. Anything that’s low or no maintenance is going to be important.”
• Resilience: The growing number and severity of natural disasters—from hurricanes in the East to wildfires in the West—is increasing demand for products that can stand up to weather extremes and better protect homes. Similarly, Webb is seeing a growing “Right to Repair” movement for products that are more repairable, moving away from a more disposable economy. The trend is big in Europe and is emerging and growing in the U.S., in the agriculture industry especially, Webb says.
How LBM Dealers Are Leveraging Technology in 2025
Though the construction industry, and LBM in particular, is notorious for being slow to adopt technology, more companies are embracing it for a range of applications, particularly those that can boost efficiencies or save money.
“Dealers always want to streamline operations,” Koenig says. “So vendors continue to introduce new tools that help their varied operations ‘talk to each other,’ automating more processes and eliminating redundancies.”
Webb, for example, believes the dam is about to break on digital price tags. After an initial investment, they can save dealers time and money versus continually replacing shelf labels—not to mention the hassles when price tags don’t match the system.
But the biggest buzzword, as in many industries, is artificial intelligence (AI). Dealers are quickly discovering how artificial intelligence tools can improve efficiencies in their businesses. Berger points to tasks such as updating product descriptions when launching ecommerce, and Webb has seen implementation for writing credit notices.
“I think it’s going to be more accepted, when they can see that it’s something to use as an additional tool to simplify,” Berger notes. Like their customers, “dealers are also suffering from lack of workforce. [They’re open to] anything that lets them get more done with their diminished resources.”
As LBM dealers navigate 2025, staying ahead of housing market trends, product innovations, and technology adoption will be critical for success. Stay informed and adaptable to meet customer demands in a changing economy.
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