URGENT UPDATE: The Pennsylvania construction industry is in a significant slowdown, impacting builders and homeowners alike. Greg Harris, owner of G.P. Harris Construction, Inc. in Jonestown, Lebanon County, reports a dramatic drop in customer inquiries for major remodeling projects, reflecting a nationwide trend in declining construction spending.
Harris stated, “Through 2023 we were extremely busy, and then it just seemed to be people lost the confidence to spend large amounts of money.” The shift has resulted in a focus on necessary repairs over cosmetic renovations, leaving many contractors scrambling.
The slowdown is primarily driven by a combination of higher interest rates, inflation, and increasing material costs, creating an environment where many homeowners are hesitant to invest. As of September 2024, the median home price in Pennsylvania remains high at $299,900, up 3.4% year-over-year, further complicating the affordability crisis.
According to the Associated General Contractors of America, fewer than half of the nation’s metro areas added construction jobs between August 2024 and August 2025 for the first time since 2021. Chief economist Ken Simonson emphasized that “construction employment has stalled as owners pull back on projects in the face of higher costs.”
Challenges are not limited to residential projects. Mike Klinepeter, president of Pyramid Construction in Wormleysburg, noted, “It just feels like a very prolonged, extended process on projects getting started.” He highlighted difficulties in securing financing and navigating complex municipal building permit processes, which vary drastically across regions.
While residential construction saw a slight increase of over 5% in July to an annualized rate of 1.4 million homes, many builders like Brian Miller from EXCEL Remodeling are experiencing a dramatic shift in project backlogs. Miller remarked that the company’s usual eight to ten-week project timeline has lengthened, particularly for larger, more complex renovations.
The ongoing economic uncertainty is causing homeowners to postpone or eliminate plans for remodeling. Harris explains, “The excessive funds dried up and people couldn’t swallow that price increase,” leaving many to reconsider ambitious projects. Since 2020, construction prices, influenced by tariffs, have risen by 18%, a significant burden on potential remodelers.
Additionally, higher interest rates have discouraged homeowners from applying for home equity loans. As of now, the benchmark five-year $30,000 home equity loan stands at approximately 8.13%. Although the U.S. Federal Reserve recently cut interest rates by 0.25%, experts warn that prices for construction materials are unlikely to decrease significantly.
Looking ahead, Klinepeter predicts that 2026 will mirror the challenges of 2025, especially amidst the ongoing federal government shutdown and Pennsylvania’s budget impasse. “Many of our projects are funded through government money, which could mean more delays,” he stated.
Despite the current downturn, both Harris and Klinepeter express cautious optimism about future recovery. Harris noted, “They say 2026 is going to be a good year in the remodeling world. Hopefully, the interest rates come down.”
As the construction industry grapples with these urgent challenges, homeowners are advised to stay informed about market trends and financing options. The current landscape is evolving, and the immediate future remains uncertain.
Stay tuned for more updates on this developing story.
