State of the Industry: AIA, NAHB & Harvard Forecasts

It’s mid-year 2026 with first-half economic forecasts available from the American Institute of Architects and the National Association of Home Builders. Neither of their reports—on nonresidential construction and on residential housing—is particularly rosy. But builders and architects I talk to are more positive.

The high-end market for single-family custom homes, restoration and renovation, adaptive use, and the institutional nonresidential segments are the most buoyant, driven in large part by an aging demographic with equity and high-performing stock market returns. If you are a builder of data centers supporting the burgeoning artificial intelligence industry, you can get rich fast. But if you are reading this, you likely don’t build data centers.

When I ask our builder and architect readers, “How’s business?” they have lately been telling me, “We’re busy.” This leads to my next question, “Busy building and billing hours or busy quoting jobs?” The answer is often, “We have had an uptick in interest in the last few months with a lot of good opportunities.”

Multifamily housing had a strong rebound in June, up to a seasonally adjusted rate of 532,000 units forecast for 2026. June’s year-over-year increase was 17% according to NAHB. New single-family construction is an estimated 895,000 SAR units, down 3.2% year-over-year in June.

The AIA Consensus Construction Forecast, released on July 20, 2026, corroborates my “uptick in quotes” anecdote. “Inquiries about new work are up 3% in June,” according to the most recent report. AIA’s estimate for total nonresidential construction is $846 billion. While the AIA survey leans toward the economic conditions at large firms, TRADITIONAL BUILDING readers are more typically small and medium-size firms that work in the high-end segments for generational estates, private schools, churches, boutique hotels, and the adaptive use of infill buildings, some of it historic tax credit work.

Nevertheless, we all know what the headwinds are, and both AIA and NAHB talk about them. With an ABI score of 47.3 (50 is the breakeven point) the AIA explains, “for construction, the link between oil prices and building material costs is especially important. Historically, a 10% year-over-year increase in Brent Crude oil prices has produced a 4-5% increase in construction material prices, three months later. Oil prices rose 54% in April; 66% in May and 36% in June this year vs. last.”

The NAHB estimates new residential housing to be 1.43 million units this year, having had a 19% jump in the month of June. Of these, 895,000 units are single-family and 532,000 multifamily. NAHB goes on to predict “no drop in interest rates as the Federal Reserve wrestles with an above 2% inflation rate.”

Residential restoration and renovation continue to be healthy due to the aging housing stock, homeowners with strong home equity, aging in place, and nowhere else to move, affordably. A third source of economic forecasts is the Harvard Joint Center for Housing Studies’ Remodeling Futures Program, which estimates $519 billion in R&R spending in 2027.

While our economy may be treading water, there are reasons why the builder, architect, interior designer, and traditional building trades readers of TRADITIONAL BUILDING and PERIOD HOMES are doing fine. They have a book of past clients who own multiple houses and/or sit on boards at schools, museums, and churches. These clients now have children and grandchildren they want to accommodate by building generational family compounds. And these same children are building or remodeling their own homes, with help from the professionals their parents recommend.

Our readers, those who make themselves known to us and others, are typically well-established, well-managed firms with trusted trade partners and skilled laborers. When I ask a builder, “Why do clients hire you?” they always talk about the skill and longevity of their crews, people who can respond promptly to customer requests. The labor shortage has affected all of us, but less so for well-established firms.

Word-of-mouth referrals are everyone’s favorite sales lead, but some firms are better at cultivating word-of-mouth than others. Publicity—whether magazine stories, social media, or industry networking—works to accelerate word-of-mouth referrals. I have noticed an increase in our readers’ efforts to get PR, and attendance at industry events is up. New business development takes more effort these days.