Consumer Experiment also Reveals Building Product Prioritization
Builder 100 – Zonda’s 37th annual gathering of top U.S. builders – started yesterday. The event covers critical industry topics, including the potential impacts of tariffs and ultimate consumer response within the housing industry.
Zonda building products expert Todd Tomalak presented a session titled ‘10 Industry Shifts No One’s Talking About (Yet).’ In tandem, his research team released its monthly Building Products Outlook, which includes a timely consumer experiment in response to rising costs due to tariffs.
“We think the industry should be prepared for an increase of about 9.3% to ‘sticks and bricks,’ taking into account not only direct costs from tariffs, but also baseline inflation and knock-on costs from domestic manufacturers,” says Todd Tomalak, Principal, Advisory of Building Products, Zonda. “With that, we looked at trends that we believe will impact U.S. consumers, what compromises they’ll consider and ultimately what we think consumers will buy in 2025.”
Homeowners have finite money, and rising costs in one product can spill over into reduced spending on other products, even if those other products have no direct tariff exposure.
If homeowners prioritize one product with rising costs as more important than other products, they may cut back spending on less critical categories.
Our team conducted an analysis of this phenomenon using proprietary Zonda data, and we believe we have the first definitive analysis in the industry on recent homebuyer substitutions amid rising costs.
Zonda analyzed relative tradeoffs of products selected as costs changed 2018-24, to learn relative differences in price sensitivities.
There are huge differences in price sensitivity on selected upgrades in the home.
Finally, brands are even more sensitive than products, because individual brands can be substituted for similar experiences at varied costs. Rising costs due to tariffs are most likely to cause major swings between what brands consumers select.
Learn more about our Building Products Outlook with exclusive research, forecasts and analysis.
Zonda provides data-driven housing market solutions to the homebuilding industry. From builders to building product manufacturers, mortgage clients, and multifamily executives, we work hand-in-hand with our customers to streamline access to housing data to empower smarter decisions. As a leading brand in residential construction, our mission is to advance the home building industry, because we believe better homes mean better lives and stronger communities. Together, we are building the future of housing. zondahome.com