Construction’s Cloudy Outlook

This year expects to see challenges in the housing market, construction industry, and claims. The headwinds are plenty: higher interest rates for construction loans, rising labor and material costs, slowing demand from homebuyers squeezed by more expensive mortgages, and fears of a looming recession as cities continue to recover from the pandemic. All of these factors raise the specter of a widespread housing downturn.

Additionally, natural catastrophes have contributed to a hard insurance market that has resulted in many carriers pulling out of states -- California and Florida in particular -- making it difficult for homeowners to secure reasonably priced coverage, if they can obtain it at all.

Those that work in the construction industry -- whether they are builders, claims professionals, legal, or consultants -- can expect to see a construction slowdown in the months ahead.

Will this result in fewer claims? Time will tell. Signs of a homebuilding decline are already evident.