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US Residential Construction Market Size 2025-2029

The us residential construction market size is valued to increase USD 242.9 million, at a CAGR of 4.5% from 2024 to 2029. Increasing household formation rates will drive the us residential construction market.

Major Market Trends & Insights

By Product - Apartments and condominiums segment was valued at USD 509.50 million in 2022
By Type - New construction segment accounted for the largest market revenue share in 2022

Market Size & Forecast

Market Opportunities: USD 39.65 million
Market Future Opportunities: USD 242.90 million
CAGR from 2024 to 2029 : 4.5%

Market Summary

The Residential Construction Market in the US is a dynamic and evolving industry, shaped by various factors and trends. Core technologies and applications, such as Building Information Modeling (BIM) and energy-efficient systems, are increasingly adopted to enhance project efficiency and sustainability. In fact, the use of BIM in residential construction is projected to reach 50% penetration by 2025, according to industry reports. Service types and product categories, including general contracting, design-build, and modular housing, cater to diverse residential construction needs. However, challenges persist, including rising material costs and skilled labor shortages for large-scale residential real estate projects. Regulations, such as the International Energy Conservation Code, drive the focus on sustainability in residential construction projects. The regional landscape is diverse, with the South and West regions leading in residential construction activity due to population growth and favorable economic conditions. These evolving market dynamics offer significant opportunities for industry players to innovate and adapt to the changing landscape.

What will be the Size of the US Residential Construction Market during the forecast period?

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How is the Residential Construction in US Market Segmented and what are the key trends of market segmentation?

The residential construction in us industry research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD million' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments. ProductApartments and condominiumsLuxury HomesOther typesTypeNew constructionRenovationApplicationSingle familyMulti-familyConstruction MaterialWood-framed ConcreteSteel Modular/PrefabricatedGeographyNorth AmericaUS

By Product Insights

The apartments and condominiums segment is estimated to witness significant growth during the forecast period.

The residential construction market in the US continues to evolve, with apartments and condominiums being key contributors to its growth. Urbanization is a significant driver, as more Americans opt for the convenience and amenities of city living. In response, developers are constructing modern, sustainable, and community-focused high-rise buildings and condominium complexes. Smart home technology and energy efficiency standards are becoming increasingly important in these projects, with Building Information Modeling (BIM) software guiding the design process. Modular construction, geotechnical engineering, and quality control measures ensure structural integrity and safety. Building codes and permitting processes are strictly adhered to, with green building certifications such as LEED and Energy Star driving the adoption of sustainable building practices. Masonry techniques, foundation design, and exterior cladding are essential elements of the construction process, with insulation materials and HVAC systems ensuring energy efficiency. Safety regulations govern electrical wiring, roofing systems, and plumbing fixtures. Construction scheduling is facilitated by project management software, with prefabricated components and 3D building modeling streamlining the process. Construction automation and waste management are also crucial considerations, with cost estimation models helping developers stay within budget. Environmental impact assessments and structural engineering studies are essential to minimize the environmental footprint and ensure safety. Framing techniques and foundation design are optimized for durability and cost-effectiveness. Safety regulations and quality control measures are strictly enforced to ensure the safety and satisfaction of residents. Overall, the residential construction market in the US is dynamic and forward-thinking, with a focus on sustainability, safety, and community.

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The Apartments and condominiums segment was valued at USD 509.50 million in 2019 and showed a gradual increase during the forecast period.

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Market Dynamics

Our researchers analyzed the data with 2024 as

The US Residential Construction Market Report is Segmented by Type (Apartment & Condominiums, Villas and Landed Houses), by Construction Type (New Construction and Renovation), by Construction Method (Conventional On-Site, and More), by Investment Source (Public and Private), and by Region (Northeast, Midwest, Southeast, West, and Southwest). The Market Forecasts are Provided in Terms of Value (USD).

The North American residential construction market, valued at $850 million in 2025, is projected to experience robust growth, driven by several key factors. A burgeoning population, particularly in urban centers, coupled with increasing household formations, fuels consistent demand for new housing units. Furthermore, low mortgage interest rates (historically, though this is subject to fluctuation) and government incentives aimed at boosting homeownership have stimulated market activity. The market segmentation reveals a strong preference for single-family homes, particularly in suburban and rural areas, alongside a notable increase in multi-family dwellings catering to urban renters and the growing demand for rental properties. New construction continues to dominate the market share, although renovation and remodeling projects represent a significant and growing segment, particularly as existing housing stock ages and requires upgrades. Leading players like Lennar Corporation, D.R. Horton, and PulteGroup are well-positioned to capitalize on these trends, utilizing innovative building techniques and sustainable materials to meet evolving consumer preferences. However, the market also faces challenges. Rising material costs, labor shortages, and increasing regulatory compliance requirements pose significant headwinds. Supply chain disruptions, though less severe than in recent years, still impact project timelines and budgets. Furthermore, fluctuations in interest rates and economic uncertainty can influence buyer confidence and affect overall market demand. Despite these hurdles, the long-term outlook for the North American residential construction market remains positive, fueled by demographic shifts and sustained investment in infrastructure development. The market is expected to maintain a compound annual growth rate (CAGR) of 4.50% from 2025 to 2033, indicating a substantial expansion in market size and value over the forecast period. The continued evolution of building technologies, focusing on energy efficiency and smart home integration, will further shape market dynamics in the coming years. Recent developments include: December 2022: In southeast Columbus, D.R. Horton intends to build homes for USD 215 million., December 2022: According to the company's fourth-quarter results call, Lennar Corp. has decided not to proceed with its plans to spin off its multifamily subsidiary, Quarterra, by the end of the year owing to adverse market circumstances., December 2022: At the southeast corner of Idlewild Street and Plantation Road in south Fort Myers, a 17-acre site is being cleared. According to Lee County documents, the area will be transformed into the 52-home neighborhood of Addison Square. The land was purchased by Pulte Homes for USD 2.4 million in a deal facilitated by Chuck Mayhugh of Mayhugh Commercial Advisors. The homes will vary in price from more than USD 500,000 and have 1,600 to 3,400 square feet of living space, with the majority of the homesites being grouped together along a sizable, central lake. According to Pulte executives, construction on the model houses should start by the spring, with some of them being done by the summer.. Notable trends are: 800,000 Housing Units Must Be Built Annually in Mexico to Keep Up with Demand.

According to Cognitive Market Research, the Residential Construction Market Size was USD XX Million in 2024 and is set to achieve a market size of USD XX Million by the end of 2033, growing at a CAGR of XX% from 2025 to 2033.

Asia-Pacific held largest share of xx% in the year 2024 
Europe held share of xx% in the year 2024 
North America held significant share of xx% in the year 2024 
South America held significant share of xx% in the year 2024
Middle East and Africa held significant share of xx% in the year 2024 

MARKET DYNAMICS: Residential Construction Market

KEY DRIVERS

The increasing global population is driving the need for the residential construction market.

The worldwide population has been consistently rising and is expected to keep expanding over the upcoming years. As per the United Nations, the global population is projected to hit 8 billion in 2024 and is projected to reach a maximum of approximately 10 billion. The effects of this population increase are substantial, influencing multiple sectors such as housing and healthcare. With the rise in population, there is a related increase in the demand for residential housing, requiring careful planning and resource distribution to meet the escalating needs. To meet the demand, both government entities and private sector firms are elevating their construction activities. Governments in various nations, like India, are also focusing on the advancement of rural regions. These are the main factors that have been driving the expansion of the residential construction market. Moreover, the younger population is prevalent in the age demographics of emerging markets like India, Japan, and China. The younger generation is more drawn to newly designed homes than to older buildings. The need for increased living space during and following the coronavirus pandemic resulted in heightened demand for housing, with a significant flow of new immigrants driving household formation. This is yet another element that fuels the expansion of the residential building sector. Thus, the rising global population is fuelling the demand for the residential construction sector.

(Source:https://population.un.org/wpp/assets/Files/WPP2024_Summary-of-Results.pdf

https://www.cbo.gov/publication/60727)

Restraints

Volatility of raw material prices, such as steel, concrete, is hindering the growth of the residential construction market.

The expansion of the residential building market is increasingly hindered by fluctuations in raw material costs, especially for crucial materials like aluminium, steel, concrete, and softwood lumber. With the increasing prices of these construction materials, housing affordability suffers, creating greater difficulties for both developers and homebuyers.

This increase in prices is mainly influenced by the fundamental economic concept of supply and demand. In peak construction periods, the demand for building supplies increases significantly, yet availability frequently stays limited because of worldwide shortages and disruptions. These constraints inherently drive prices upward, worsening the problem. Adding to the issue are uncertainties in the production process and erratic timelines for material arrivals, which hinder builders from finishing projects on time. Widespread inflationary pressures in the overall economy further increase expenses, as the overall increase in prices for products and services inevitably affects construction materials.

Furthermore, numerous raw materials employed in home construction are commodities traded worldwide. This makes the market more vulnerable to additional volatility resulting from geopolitical conflicts, trade disagreements, and alterations in global trade regulations, all of which can interfere with supply chains and cause price surges. As reported by the Associated Builders and Contractors, construction material prices increased by 1.3% in January 2023 alone. This figure is not only 1.3% above December 2022, but it also indicates a 4.9% rise from the prior year. Even though this is the least annual rise since January 2021, it highlights the ongoing upward trend in material expenses.

In conclusion, the fluctuations in raw material prices caused by supply-demand disparities, inflation, and global market disturbances are greatly obstructing the expansion of the residential construction sector by increasing expenses ...

The United States home construction market is projected to grow from $XX million in 2025 to $XX million by 2033, at a CAGR of 3.00% during the forecast period. Key drivers of this growth include increasing population, rising incomes, and low interest rates. Additionally, the growing popularity of smart homes and green building technologies is creating new opportunities for home builders. The market is segmented by type (apartments & condominiums, villas, and other types), construction type (new construction and renovation), and city (New York City, Los Angeles, San Francisco, Washington DC, and Miami). The new construction segment is expected to hold the largest market share during the forecast period, driven by the increasing demand for new homes from growing families and millennials. The multi-family home builders segment is projected to grow at a higher CAGR than the single-family home builders segment during the forecast period, due to the increasing popularity of urban living and the rising demand for affordable housing. Recent developments include: June 2022 - Pulte Homes - a national brand of PulteGroup, Inc. - announced the opening of its newest Boston-area community, Woodland Hill. Offering 46 new construction single-family homes in the charming town of Grafton, the community is conveniently located near schools, dining, and entertainment, with the Massachusetts Bay Transportation Authority commuter rail less than a mile away. The collection of home designs at Woodland Hill includes three two-story floor plans, ranging in size from 3,013 to 4,019 sq. ft. with four to six bedrooms, 2.5-3.5 baths, and 2-3 car garages. These spacious home designs feature flexible living spaces, plenty of natural light, gas fireplaces, and the signature Pulte Planning Center®, a unique multi-use workstation perfect for homework or a family office., December 2022 - D.R. Horton, Inc. announced the acquisition of Riggins Custom Homes, one of the largest builders in Northwest Arkansas. The homebuilding assets of Riggins Custom Homes and related entities (Riggins) acquired include approximately 3,000 lots, 170 homes in inventory, and 173 homes in the sales order backlog. For the trailing twelve months ended November 30, 2022, Riggins closed 153 homes (USD 48 million in revenue) with an average home size of approximately 1,925 square feet and an average sales price of USD 313,600. D.R. Horton expects to pay approximately USD 107 million in cash for the purchase, and the Company plans to combine the Riggins operations with the current D.R. Horton platform in Northwest Arkansas.. Key drivers for this market are: Indonesia's Hospitality Market Shifting Preference for Local and Authentic Experiences. Potential restraints include: Difficulties in Implementing Tourism Policies. Notable trends are: High-interest Rates are Negatively Impacting the Market.

The North American Residential Construction Market Report is Segmented by Property Type (single Family and Multi-Family), Construction Type (new Construction and Renovation), and Region (United States, Canada, and Mexico). The Report Offers Size and Forecasts for the North American Residential Construction Market in Terms of Value (USD Billion) for all the Above Segments.

Home builders construct single-family homes while also remodeling houses and other residential buildings. Perennially low housing stock has driven new housing development throughout the current period. Still, from early 2022 through mid-2024, the Federal Reserve rose or maintained interest rates up from historic lows; these rate hikes sent housing starts into a steady decline. Loans have become less accessible, with mortgage rates increasing, discouraging property developers from breaking ground on more residential projects. Even as the Federal Reserve has cut rates since mid-2024, mortgage rates, which are only indirectly impacted by the federal funds rate, have largely increased. Even as housing starts have fallen over recent years, house prices have seen strong growth, allowing builders to see growth. Overall, industry revenue is set to push up at a CAGR of 2.9% to $166.9 billion over the five years through 2025, including a 1.6% increase in 2025 alone. Spikes in the 30-year conventional mortgage rate reduced the number of projects available for home builders. Inflationary concerns have also led more consumers to rent instead of buy. A bright spot has been state and federal projects like affordable housing programs in large metropolitan cities. Home builders also cut expenses and raised profit by hiring subcontractors. The basic underlying need for more housing has remained strong throughout the period. Interest rates are set to gradually fall over the coming years, while the nation will remain in its housing shortage, driving growth for home builders. Home builders will aim to differentiate themselves by building homes that meet sustainability standards to achieve Leadership in Energy and Environmental Design (LEED) certification. Government programs and households will continue to be a source of income for many homebuilders. The Trump administration has proposed using federal lands for housing development but is also set to drive up costs for builders through its tariff policies. Overall, revenue is set to climb at a CAGR of 1.8% to reach $182.8 in 2030.

Europe Residential Construction Market Report is Segmented by Type (Apartment & Condominiums, Villas and Landed Houses), Construction Type (New Construction, Renovation), Construction Method (Conventional On-Site, Modern Methods of Construction), Investment Source (Public, Private), and Geography (Germany, United Kingdom, France, Italy, Spain, Netherlands, and More). The Market Forecasts are Provided in Terms of Value (USD).

Global Residential Building Construction market size is expected to reach $5789.04 billion by 2029 at 6.5%, segmented as by product type, new-single family housing construction, new-multi family housing construction, other types

The UK Residential Construction Market is Segmented by Type (Apartments & Condominiums, Landed Houses & Villas, and Other Types), by Construction Type (New Construction and Renovation), by Construction Method (Conventional On-Site, Modern Methods of Construction), by Investment Source (Public, Private), and by Geography (London, Birmingham, and More). The Market Forecasts are Provided in Terms of Value (USD).

India Residential Construction Market Report is Segmented by Type (Apartment & Condominiums, Villas and Landed Houses), Construction Type (New Construction, Renovation), Construction Method (Conventional On-Site, Modern Methods of Construction), Investment Source (Public, Private), and Geography (North India, South India, West India, East & North-East India, and More). The Market Forecasts are Provided in Terms of Value (USD).

The United States home construction market, valued at approximately $700 billion in 2025, is experiencing robust growth, projected to maintain a compound annual growth rate (CAGR) exceeding 3% through 2033. This expansion is fueled by several key factors. Firstly, a persistent housing shortage, particularly in desirable urban areas like New York City, Los Angeles, and San Francisco, continues to drive demand. Secondly, favorable demographic trends, including millennial household formation and an increasing preference for homeownership, are bolstering the sector. Furthermore, low interest rates (though this is subject to change depending on economic conditions) have historically made mortgages more accessible, stimulating construction activity. However, the market isn't without its challenges. Rising material costs, labor shortages, and supply chain disruptions continue to exert upward pressure on construction prices, potentially impacting affordability and slowing growth in certain segments. The market is segmented by dwelling type (apartments & condominiums, villas, other), construction type (new construction, renovation), and geographic location, with significant activity concentrated in major metropolitan areas. The dominance of large national builders like D.R. Horton, Lennar Corp, and PulteGroup highlights the industry's consolidation trend, while the growth of multi-family construction reflects shifting urban preferences. Looking ahead, the market's trajectory will depend on macroeconomic factors, interest rate fluctuations, government policies impacting housing affordability, and the ability of the industry to address supply-chain and labor challenges. Innovation in construction technologies, sustainable building practices, and prefabricated homes are also emerging trends expected to significantly influence market dynamics over the forecast period. The competitive landscape is characterized by a mix of large publicly traded companies and smaller regional builders. While established players dominate the market share, opportunities exist for smaller firms specializing in niche markets, such as sustainable or luxury home construction, or those focused on specific geographic areas. The ongoing expansion of the market signifies significant potential for investment and growth, despite the hurdles currently impacting the sector. Addressing supply chain disruptions and labor shortages will be crucial for sustained growth. Continued demand in key urban centers and evolving consumer preferences toward specific dwelling types will be critical factors determining the market's future trajectory. Recent developments include: June 2022 - Pulte Homes - a national brand of PulteGroup, Inc. - announced the opening of its newest Boston-area community, Woodland Hill. Offering 46 new construction single-family homes in the charming town of Grafton, the community is conveniently located near schools, dining, and entertainment, with the Massachusetts Bay Transportation Authority commuter rail less than a mile away. The collection of home designs at Woodland Hill includes three two-story floor plans, ranging in size from 3,013 to 4,019 sq. ft. with four to six bedrooms, 2.5-3.5 baths, and 2-3 car garages. These spacious home designs feature flexible living spaces, plenty of natural light, gas fireplaces, and the signature Pulte Planning Center®, a unique multi-use workstation perfect for homework or a family office., December 2022 - D.R. Horton, Inc. announced the acquisition of Riggins Custom Homes, one of the largest builders in Northwest Arkansas. The homebuilding assets of Riggins Custom Homes and related entities (Riggins) acquired include approximately 3,000 lots, 170 homes in inventory, and 173 homes in the sales order backlog. For the trailing twelve months ended November 30, 2022, Riggins closed 153 homes (USD 48 million in revenue) with an average home size of approximately 1,925 square feet and an average sales price of USD 313,600. D.R. Horton expects to pay approximately USD 107 million in cash for the purchase, and the Company plans to combine the Riggins operations with the current D.R. Horton platform in Northwest Arkansas.. Notable trends are: High-interest Rates are Negatively Impacting the Market.

Housing Starts in the United States decreased to 1307 Thousand units in August from 1429 Thousand units in July of 2025. This dataset provides the latest reported value for - United States Housing Starts - plus previous releases, historical high and low, short-term forecast and long-term prediction, economic calendar, survey consensus and news.

In July 2025, approximately ******* home construction projects started in the United States. The lowest point for housing starts over the past decade was in 2009, just after the 2007-2008 global financial crisis. Since 2010, the number of housing units started has been mostly increasing despite seasonal fluctuations. Statista also has a dedicated topic page on the U.S. housing market as a starting point for additional investigation on this topic. The impact of the global recession The same trend can be seen in home sales over the past two decades. The volume of U.S. home sales began to drop in 2005 and continued until 2010, after which home sales began to increase again. This dip in sales between 2005 and 2010 suggests that supply was outstripping demand, which led to decreased activity in the residential construction sector. Impact of recession on home buyers The financial crisis led to increased unemployment and pay cuts in most sectors, which meant that potential home buyers had less money to spend. The median income of home buyers in the U.S. fluctuated alongside the home sales and starts over the past decade.

Gain insights into the USA Residential Construction Market, size at USD 231 billion in 2023, showcasing top players and strategic insights.

Japan Residential Construction Market Report is Segmented by Type (Apartments & Condominiums, Villas and Landed Houses), Construction Type (New Construction, Renovation), Construction Method (Conventional On-Site, Modern Methods of Construction), Investment Source (Public, Private), and Geography (Tokyo, Osaka, Nagoya, Rest of Japan). The Market Forecasts are Provided in Terms of Value (USD).

Despite the pandemic's broader economic disruptions, low interest rates in 2020 initially fueled a housing market boom driven by work-from-home orders and a shift toward residential construction. This surge was a lifeline for builders amid economic turbulence. However, the tide turned in 2022 and 2023 as the Federal Reserve's interest rate hikes curbed housing investments, dampening consumer enthusiasm and slowing residential construction activity. Low housing stock and rate cuts late in 2024 led to growth in single-family housing starts, boosting revenue. Single-family home development climbed in more affordable and less densely populated areas in 2024, but new multifamily developments have plummeted. Industry revenue has been climbing at a CAGR of 0.8% over the past five years to total an estimated $233.5 billion in 2025, including an estimated increase of 0.2% in 2025 alone. The initial boom in 2020 and 2021 led to one of the most significant expansions in home-building in recent memory, yet interest rate hikes soon tempered this growth. As smaller-scale developers struggled with escalating construction costs and regulatory hurdles, larger, financially robust companies like DR Horton, Lennar and PulteGroup managed to thrive and expand their operations. These larger companies maximized their market share, leveraging their resources to navigate the challenging economic climate and maintain momentum despite the pressures of rising material costs and labor shortages. These rising material costs and labor shortages have driven up purchase and wage costs, contributing to profit declines over the past five years. Expected interest rate cuts will boost housing developers. Developers will benefit from these favorable conditions, especially those who strategically invest in less densely populated areas to meet the growing appetite for affordable housing. Rate cuts will also provide relief to smaller housing developers more sensitive to interest rate fluctuations. Sustainability also looms on the horizon, with tax incentives and energy-efficient building standards encouraging developers to explore eco-friendly construction. Still, rising material costs and labor shortages will continue to stifle profit growth and increase housing prices. Larger companies will continue to gain market share, strategically developing homes near areas with strong job growth near new large manufacturing facilities. Industry revenue is forecast to expand at a CAGR of 1.4% to total an estimated $250.6 billion through the end of 2030.

Construction Spending Market Outlook

The global construction spending market size was valued at USD 11.2 trillion in 2023 and is projected to reach USD 20.3 trillion by 2032, registering a robust CAGR of 6.2% during the forecast period. The market growth is driven by rapid urbanization, increasing infrastructure development, and rising investments in residential and non-residential construction globally.

One of the primary growth factors for the construction spending market is the rapid urbanization across both developed and developing countries. As more people migrate to urban areas in search of better job opportunities and living standards, the demand for residential buildings, commercial spaces, and infrastructure such as roads and bridges increases significantly. This urban migration places immense pressure on existing infrastructure and drives the need for new construction projects, thereby fueling market growth. Additionally, government initiatives aimed at improving urban infrastructure and housing facilities further contribute to the surge in construction spending.

Technological advancements in construction methods and materials also play a crucial role in driving the market. Innovations such as Building Information Modeling (BIM), prefabricated construction, and the use of sustainable and energy-efficient materials have revolutionized the construction industry. These technologies not only enhance the efficiency and speed of construction projects but also reduce costs and environmental impact. As a result, construction companies are more inclined to invest in new projects, boosting overall construction spending. Furthermore, the integration of digital tools and automation in construction processes is expected to continue propelling market growth throughout the forecast period.

The increasing focus on sustainable and green construction practices is another significant factor contributing to the market's growth. With growing awareness about environmental issues and the need for sustainable development, both governments and private entities are prioritizing eco-friendly construction projects. The adoption of green building standards and certifications, such as LEED (Leadership in Energy and Environmental Design), encourages investment in energy-efficient and environmentally responsible construction. This trend is anticipated to drive substantial growth in the construction spending market, as more stakeholders recognize the long-term benefits of sustainable construction.

Regionally, the Asia Pacific region is expected to witness the highest growth in construction spending, driven by the rapid economic development and urbanization in countries like China, India, and Southeast Asian nations. Government initiatives to improve infrastructure, coupled with rising disposable incomes and population growth, are key factors fuelling the market in this region. North America and Europe are also significant contributors to the market, with substantial investments in both residential and non-residential construction projects. Moreover, the Middle East & Africa region is projected to experience considerable growth due to increasing infrastructure development and urbanization.

The residential construction sector is a cornerstone of the construction spending market, driven by the increasing demand for housing in urban areas. As cities expand and populations grow, the need for new residential developments becomes more pressing. This demand is not only for traditional housing but also for modern living spaces that incorporate smart technologies and sustainable practices. The integration of energy-efficient systems and eco-friendly materials in residential construction is becoming increasingly popular, as homeowners and developers alike seek to reduce environmental impact and enhance living standards. Furthermore, government policies promoting affordable housing and urban renewal projects are providing significant impetus to the residential construction sector, ensuring its continued growth and relevance in the broader construction market.

Type Analysis

The construction spending market by type is segmented into residential, non-residential, and infrastructure. The residential segment encompasses expenditures on housing projects such as single-family homes, multi-family residential buildings, and apartment complexes. This segment is driven by increasing urbanization, population growth, and government policies promoting affordable housing. The

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US Commercial Construction Market Size 2025-2029

The us commercial construction market size is forecast to increase by USD 191 billion at a CAGR of 2.7% between 2024 and 2029.

The Commercial Construction Market in the US is experiencing significant growth driven by the increasing trend towards sustainable building design and the emergence of smart cities. Green buildings, which incorporate energy-efficient designs and renewable energy sources, are gaining popularity due to their environmental benefits and cost savings over time. This trend is expected to continue, with the US Green Building Council reporting that nearly half of all new commercial construction projects in the US are now green certified. However, the market is not without challenges. One of the most pressing issues is the lack of skilled labor in the construction industry. According to the Associated General Contractors of America, over 80% of contractors report difficulty in filling hourly craft positions. This labor shortage is driving up costs and delaying project timelines, making effective workforce management a critical challenge for construction companies. To capitalize on the growth opportunities in the market, companies must focus on innovative solutions to address the labor shortage, such as training programs and partnerships with vocational schools. Additionally, leveraging technology, such as automation and modular construction, can help improve efficiency and reduce reliance on manual labor. Overall, the Commercial Construction Market in the US presents significant opportunities for companies that can effectively navigate these challenges and stay ahead of the trend towards sustainable and smart building design.

What will be the size of the US Commercial Construction Market during the forecast period?

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The commercial construction market in the US is experiencing significant dynamics and trends. Labor force shrinkage and escalating costs are major challenges for office building construction, repair and maintenance, water infrastructure projects, and mixed-use developments. Infrastructure development programs and urban regeneration are driving the need for energy-saving designs, outdoor leisure facilities, and renovation and retrofitting. Product lead times and fluctuating material prices add complexity to retail building projects in the non-residential building market. Labor shortages and rising building material prices are also impacting infrastructure projects and refurbishment and demolition activities. These factors necessitate innovative solutions and strategic planning for US businesses in the construction sector. Market research firms like FMI, Grand View Research, and Juniper Research provide valuable insights into these trends and dynamics.

How is this market segmented?

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD billion' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments. SectorPrivate constructionPublic constructionTypeBuildingOthersEnd-userOffice buildingsRetail spacesHotels and hospitalityHealthcare facilitiesOthersGeographyNorth AmericaUSEuropeMiddle East and AfricaAPACSouth AmericaRest of World (ROW)

By Sector Insights

The private construction segment is estimated to witness significant growth during the forecast period.

The commercial construction market in the US encompasses the development of various structures, including restaurants, grocery stores, shopping centers, office facilities, hospitals, and educational institutions. Notable projects, such as the El Paso VA Health Care Center in Fort Bliss, which had its groundbreaking on August 28, 2024, and Skymark Reston Town Center, the tallest residential tower in the Capital Region, which reached its topping out point in October 2023, contribute significantly to this sector's expansion. Infrastructure development programs, such as electric grid reconstruction and water infrastructure projects, are also driving the commercial construction market. For instance, the infrastructure bill, which includes funding for infrastructure projects, is expected to boost the market's growth. Additionally, the non-residential building market is experiencing a surge due to urban regeneration and renovation and retrofitting initiatives. However, the market faces challenges, including labor shortages, cost escalation, and fluctuating material prices. The construction industry's labor shortage is a significant concern, with an estimated 200,000 unfilled jobs in 2023. Furthermore, infrastructure projects often face delays due to labor shortages and rising material prices. The non-residential segment, including office buildings and retail buildings, is experiencing increased demand due to the shift towards energy-saving designs and the need for better communic

The global residential construction market size reached approximately USD 4.92 Trillion in 2024. Further, the residential construction industry is further projected to grow at a CAGR of 5.00% between 2025-2034, reaching a value of USD 8.01 Trillion by 2034.