A recent article from BizJournals shed light on an emerging challenge that’s quietly reshaping the real estate and construction landscape: a continued slowdown in architecture billings, fueled in part by new tariffs on imported building materials. While this may sound like a niche issue, it has meaningful implications for everyone from homeowners to developers.

Architecture billings are a leading indicator of construction activity. When design contracts decline—as they have for 28 of the past 31 months—it signals that fewer projects are entering the pipeline. Add in tariff-driven material cost increases and extended lead times, and you have a more complex, cost-sensitive environment for real estate. But within these shifts are real opportunities, if you know where to look.

Key Insights from the Article

• The Architecture Billings Index (ABI) registered at 47.2 in May. While that’s a slight improvement from April’s 43.2, any number below 50 signals contraction.
  
• Tariffs on materials like steel, aluminum, façade panels, and smart glass are driving construction costs up by 10–15%.
  
• Project timelines are stretching, with some firms reporting material delays of up to 15 weeks.
  
• Architecture firms are renegotiating supplier contracts and rethinking project scopes in response to rising costs and limited availability.
  

What This Means for Buyers, Sellers, and Investors

For buyers: 

This environment may seem challenging at first glance, but it also presents a competitive advantage. As new construction becomes more expensive and less predictable, existing homes—especially those that are move-in ready—become increasingly desirable. Buyers who are focused, flexible, and value-driven can secure homes that might otherwise be out of reach in a stronger construction market.

For Sellers: 

Particularly those with high-quality finishes or design-forward homes, you are in a strong position. If your property has unique architectural features or recent upgrades, now is the time to highlight them. With new builds facing delays and cost overruns, buyers are more inclined to act on listings that offer quality, style, and immediacy. Positioning and presentation matter more than ever.

For Investors and Developers:

You should approach the market with a well-calibrated strategy. With costs and timelines shifting, it’s important to build flexibility into every stage—from sourcing materials locally to locking in pricing and scheduling early. Also, keep an eye on where design work is still active—some sectors of commercial may stay more stable than multifamily or speculative commercial.

What This Means for Houston Real Estate

Houston, with its track record of adaptability and innovation, is well equipped to weather shifts like these. While larger-scale new developments may face headwinds from rising costs, the city’s underlying fundamentals remain solid. There’s opportunity here—not just in new construction, but in elevating existing inventory.

Expect a greater emphasis on thoughtfully renovated homes, adaptive reuse, and high-functioning properties in established neighborhoods. Houston’s depth of housing stock, flexible zoning, and entrepreneurial development culture give it a distinct edge when navigating uncertain conditions.

For buyers and sellers, this means opportunity isn’t just alive—it’s evolving. The market may be adjusting, but Houston continues to reward those who move strategically and with clarity.

Navigating the Market with Strategy and Confidence

Shifts in the architecture and construction world may not make daily headlines, but they absolutely influence the real estate decisions we make today. Whether you’re evaluating a resale purchase, preparing to list, or considering an investment, having the right guidance makes all the difference.

If you’d like to talk through the market and how these changes affect your real estate goals, I’m always here to help.

Until next time,
Dee Dee Guggenheim Howes