Toolbox Newsletter February 2026
Residential Construction Softens Amid Market Headwinds
The latest residential housing market report, delayed by the federal government shutdown last fall, indicates that builders have faced significant headwinds in recent months. Elevated mortgage rates earlier in the year have restrained buyer demand and weighed on home building activity, along with persistently high construction costs. Overall housing starts declined 4.6% in October to a seasonally adjusted annual rate of 1.25 million units, according to HUD and the Census Bureau. This pace reflects the number of housing units builders would begin over the next 12 months if October’s activity were sustained. Within the total, single-family starts rose 5.4% to a seasonally adjusted annual rate of 874,000 units but remain 7.8% lower than a year earlier. On a year-to-date basis, single-family starts are down 7.0%. Given recent volatility, the three-month moving average provides a clearer signal, declining to 857,000 units. In contrast, multifamily starts, which include apartment buildings and condominiums, fell sharply, down 22.0% to an annualized pace of 372,000 units. The three-month moving average for multifamily construction has trended lower to 424,000 units, and activity is 7.9% below year-ago levels. The total number of housing units under construction stood at 1.3 million in October, down 10.1% from a year earlier. Single-family homes under construction fell to 596,000 units, a 7.0% year-over-year decline and the lowest level since November 2020. Multifamily units under construction declined to 790,000, down from peaks above 1 million units in December 2023 and 4.0% lower than a year ago.
Leadership List
Board of Directors 2026 -President, Kevin Maurer -Vice President, Jeff Wedding -Secretary, Zach Phillips -Treasurer, Mindy Ball -Immediate Past President, Jeremy Morgan Director Mark Eneix Director Morgan Hallmark-Grab Director Matthew Paruch Director Jamie Richmond Director Lisa Sears Director Mike Zemla Executive Officer Christy VanSchoten
Calendar of Events (Dates Subject to Change) 2025 PARADE OF HOMES Available now at the hbaofmidmichigan.com Bowling For Builders with the SEDP March 24th General Membership Meetings March 18th September 16th December 2nd Annual Meeting & Holiday Party 4th Annual Clays for Contractors May 19th at the Grand Blanc Huntsmans Club 2nd Annual Pull & Plate September 24th HBAM Summer Convention 8/5-8/7 in TC Trunk or Treat with Carter Kitchen & Bath October 22nd
If you're looking to showcase your business at a home show this year, the HBA of Great Lakes Bay Region has extended an opportunity to our local with member pricing, enter the code listed at check out.
NAHB Updates 3 Safety Programs NAHB recently updated three key safety and health programs specifically designed for residential construction companies to use as model safety plans. The written safety programs were created with smaller construction companies in mind. NAHB published a model safety program for home builders in 2017 and developed similar programs for remodelers and siding contractors a few years later.
FHA Extends Waiver for Flood Elevation Requirements The FHA recently announced the extension of a temporary waiver for new construction in Special Flood Hazard Areas as part of the Federal Flood Risk Management Standard requirements issued by HUD. The waiver – initially set to expire Feb. 21, 2026 – will continue to exempt new single-family construction from the elevation standard requiring that the lowest floor of new construction be at least two feet above the base flood elevation. This waiver applies to FHA-insured mortgages on new single-family construction. The partial waiver will be in effect until Feb. 19, 2027. NAHB Urges Congress to Ease Regulatory Burdens The best way to ease the nation’s housing affordability crisis is for policymakers to eliminate excessive regulations that are preventing builders from increasing the housing supply, NAHB told Congress recently. Testifying at a congressional hearing on housing affordability, Buddy Hughes, chairman of NAHB and a home builder from Lexington, N.C., said that in order to ease housing constraints for home buyers and renters, it is imperative to eliminate excessive regulations that hinder the construction of new homes and apartments.
NAHB Scores Advocacy Victories NAHB achieved several important legislative, regulatory and legal victories in 2025 that resulted in an immediate and positive impact for our industry and our members. NAHB helped secure several key housing and business provisions in the tax bill known as the One Big Beautiful Bill Act. Other milestones included important building code wins, two victories in the Supreme Court and significant advances in state and local policy. View the full report of NAHB’s 2025 advocacy wins.
Key Changes that Affect 2025 Taxes The 2026 tax season opened on Monday, Jan. 26, as the IRS began to accept and process 2025 tax returns. Tax returns are due by April 15, 2026. This tax filing season brings several changes stemming from the One Big Beautiful Bill Act (OBBBA) that may lower your business or personal tax liability. In addition to blocking the $4 trillion tax hike that had been to set to occur starting in 2026, OBBBA includes important housing and business provisions that apply to the 2025 tax year. Learn more.
The NAHB/Westlake Royal Remodeling Market Index (RMI) posted a reading of 64 for the fourth quarter of 2025, up four points compared to the previous quarter. The NAHB/Westlake Royal RMI survey asks remodelers to rate five components of the remodeling market as “good,” “fair” or “poor.” Each question is measured on a scale from 0 to 100, where a number above 50 indicates that a higher share view conditions as good than poor. The Current Conditions Index is an average of three components: the market for large remodeling projects, moderately-sized projects and small projects. The Future Indicators Index is an average of two components: the rate at which leads are coming in and the current backlog of remodeling projects.
Holding Pattern for the Fed The Fed paused its easing cycle at the conclusion of the January meeting of the Federal Open Market Committee, the central bank’s monetary policy body. The Fed held the short-term federal funds rate at a top rate of 3.75%, the level set in December. While reductions for the federal funds rate do not have a direct effect on mortgage interest rates, which remain slightly above 6%, federal funds rate reductions do lower interest rates on builder and developer loans, which helps the supply-side of the housing market.
Remodeling Market Sentiment Strengthens in Q4 of 2025
Some Markets See Price Declines Since the onset of the COVID-19 pandemic, house prices have surged nationwide. Between the first quarter of 2020 and the third quarter of 2025, national house prices climbed 54.9%. Local markets saw broad gains as well, with cumulative appreciation ranging from 18.3% to 88.4%, and 159 metro areas reached their highest recorded house prices in the third quarter of 2025. However, this national trend masks significant variation across local markets. More than half of metro areas have now experienced at least some decline from their recent price peak.
NAHB Expands Member Savings Program in 2026
NAHB members saved a total of more than $40 million last year through a variety of exclusive offers designed to support their businesses and everyday operations. The Member Savings Program has added several new partners, including: Ford Pro – Members can save up to $5,500 on Ford Pro’s trucks, vans and SUVs. Mercedes-Benz Vans – Members receive an additional $500 off new Cargo Vans, Crew Vans, Passenger Vans and Cab Chassis. Ram – Members can enjoy a $1,000 discount on trucks and vans (stackable with in-market offers). In addition to savings programs for vehicles, NAHB also introduced two other valuable programs in 2025: Baytek Intuit QuickBooks, offering members up to 50% off select QuickBooks Online and QuickBooks Desktop Solutions. Best Buy Business, providing savings of up to 40% off retail on thousands of appliances, smart-home technology and whole-home audio from top brands.
AJ Johnson Construction Co. Inc Acrisure Alexandra Edwards of Phillips Insurance Alliance Grounds Services LLC Antcliff Windows & Doors Architectural Glazing Systems, Inc. New member Beth Roman of Carter Kitchen & Bath Ben Staley of Staley Construction Company LLC Bois Insurance Agency Boots Construction Bossman Construction Co LLC Brokaw Group/Brokaw Commercial Builders First Source Lapeer Builders First Source Saginaw Brian Christiansen of Staley Construction Company LLC Carbs Contracting LLC NEW Cardinal Roofing Corp. Carter Lumber Company Carter Kitchen & Bath Chuck Thompson Holdings Inc. Church's Insulation CF Legal, PC Construction Management Services LLC Consumers Energy Creekside Hearth Patio & BBQ Davison Overhead Door Co Dallaire Heating Cooling & Electrical Deborah Sipes of Phillips Insurance Dynamic Home Solutions DF Floor Covering D&M Service Pros
HBA OF MID-MICHIGAN MEMBERSHIP 2025
Forsythe Bros Lawn Services LLC Genesee Ceramic Tile Glendale Construction LLC Grand Legacy Homes Inc. Great Lakes Grills LLC GreenStone Farm Credit Services Gross Construction Harrod Painting Hill Steel & Builders Supply Hodges Supply IL Construction Iversons Lumber Company JW Morgan Construction LLC Kile Sayer of the Stone Specialists Lake & Land Custom Homes LLC Lake Michigan Credit Union LeaSon Builders LLC Linda Leach of Genesee Ceramic Tile Linden Kitchen & Bath Lucas Brothers Construction Lunghamer Ford of Owosso Mark Elasivich of Staley Construction Company LLC Markita Henige of Phillips Insurance Mason Burgess Title Agency Master Seal Asphalt Maintenance Inc. Maurer Heating Co Metamora Building & Development Metcalf Electric Meyer Electric Inc M I Homes NEW Michigan Lumber Company Michigan Propane Commission Midwest C ommercial Construction LLC
Mike Building Co. Modern Concrete NEW PHI Home Services Phillips Insurance Pine Hollow Custom Homes Group Inc. Pinkleman Custom Homes Purves Construction Randal J Cizek Architect Raptor Pest Control Rod Kulhanek Builders LLC Roe Enterprises Shiawassee Economic Development Partnership Signet Residential Inc Sherman Heating and Cooling Shiawassee Chamber of Commerce Staley Construction Company LLC Staley's Plumbing & Heating Inc Stone Specialists Inc Superior Lawn & Landscape Inc Swank Builders Inc Sweers Roofing The Cabinet Gal NEW The State Bank Timothy Elasivich of Staley Construction Company LLC Timbergate Construction LLC Triple H Ideal Contractors LLC Vantage Homes, Inc Vetcon Inc Vets Access LLC NEW Vylla Home Weekes Forest Products Weir Building Company Werth Roofing & Siding Co Wimsatt Building Materials/SRS DIstribution Yeo & Yeo CPA's & Advisors