TL;DR: U.S. housing starts hit their lowest point since May 2020, dropping to 1.246 million in October 2025. The real problem isn’t interest rates. Construction productivity’s been flat for 50 years while other industries modernized. With a 1.5 million home deficit and 93% of firms struggling to fill positions, outdated paper-based documentation systems are creating friction the industry doesn’t have time for.

Why Housing Construction Keeps Missing the Mark

• Housing starts dropped to 1.246 million in October 2025, the lowest since the pandemic

• Construction productivity has been flat or declining for 50 years while other industries improved

• 93% of construction firms report open positions they’re unable to fill

• Paper-based documentation systems create delays at every handoff between material providers, contractors, and lenders

• Construction costs represent 40% to 67% of new home prices, making operational efficiency a massive affordability lever

What’s Really Behind the Housing Crisis

Housing starts dropped to 1.246 million in October 2025. That’s the lowest level since May 2020, when the pandemic shut down job sites nationwide.

We’re back at crisis levels. Except this time, there’s no global health emergency to blame.

The industry keeps pointing at interest rates. Builder sentiment stayed below breakeven for 20 consecutive months in 2025, with 77% of builders expecting continued high rates. The Federal Reserve cut rates, and builder confidence didn’t budge.

Here’s what that tells you: the problem isn’t the cost of money.

The Bottom Line: When rate cuts don’t restore builder confidence, the crisis runs deeper than financing.

Construction Productivity Has Been Flat for 50 Years

Here’s what the housing shortage headlines miss. Construction productivity‘s been flat or falling for five decades. Walk onto any job site today, and you’ll see the same methods used 30 years ago.

Every other sector got better:

• Manufacturing got faster

• Logistics got smarter

• Agriculture modernized

Construction got slower.

We’re facing a 1.5 million home deficit, with some estimates putting the shortage above 3.5 million units. The nation needs housing. Builders want to build. The industry operates on infrastructure from 1975.

Here’s Why This Matters: Flat productivity for 50 years means construction hasn’t gotten the efficiency gains that made other industries more affordable.

How Much Do Construction Costs Impact Home Prices?

Construction costs account for more than two-thirds of new home prices in the Southwest and West, where most building happens. Even in expensive markets like California, construction represents 40% to 60% of a home’s value.

What does this mean for you? Operational efficiency improvements have serious leverage on affordability.

Right now, we’re still running on paper documentation, manual verification, and systems that require phone calls to confirm what should be automatic:

• Material providers lose visibility into deliveries

• Contractors chase missing paperwork

• Lenders delay funding or charge extra because they’re unable to verify delivery in real time

The friction compounds at every handoff.

The Reality: When construction represents 40% to 67% of home prices, inefficient documentation systems directly impact housing affordability.

Why Labor Shortages Make Documentation Problems Worse

93% of construction firms report open positions they’re unable to fill. More than one in five construction workers is 55 or older. As those workers retire, the labor pool shrinks.

When you have fewer people available, systems that create friction become failures. Every documentation delay, every missing proof of delivery, every manual verification step takes time you don’t have.

The industry doesn’t have the workforce to operate this way anymore.

The Takeaway: Labor shortages turn inefficient documentation from an annoyance into a crisis.

What Changes Construction Documentation

We’ve normalized antiquated workflows because “that’s how construction works.” Paper PODs. Manual confirmations. Documentation that disappears into filing cabinets.

The gap exists because no one with the right combination of technology execution and construction finance authority has been positioned to fix it.

Modern tools applied to outdated systems create serious advantages. GPS coordinates, timestamps, photos, instant notifications. Documentation that’s verifiable, permanent, and automatic.

Here’s what happens when documentation gets digitized:

• Material providers reduce risk

• Contractors gain real-time visibility

• Lenders verify delivery without adding days to the process

This isn’t about changing everything overnight. It’s about digitizing the obvious.

What You Need to Know: Digital POD systems with GPS, timestamps, and photos eliminate documentation friction at every handoff.

The question isn’t whether construction will modernize. The question is how long we’ll keep building houses like it’s 1975 while wondering why we’re unable to meet demand.

Key Takeaways

• Housing starts hit 1.246 million in October 2025, the lowest level since the pandemic. Interest rate cuts haven’t fixed builder confidence

• Construction productivity’s been flat for 50 years while every other major industry improved, creating a widening efficiency gap

• Construction costs represent 40% to 67% of home prices, making operational efficiency a direct lever for housing affordability

• 93% of construction firms report unfilled positions, turning documentation friction from an annoyance into a critical failure

• Paper-based POD systems create delays at every handoff between material providers, contractors, and lenders

• Digital documentation with GPS, timestamps, and photos eliminates manual verification and gives all parties real-time visibility

• The housing shortage won’t get fixed by doing the same things faster. The industry needs to digitize outdated workflows we’ve been accepting for decades