Why Brokers Should Pay Attention to New Construction Deals in 2025

New construction investing has seen a strong rebound so far this year, and it only looks to continue as investors seek out strategies to combat the nation’s housing shortage. The rising demand for quality housing and limited available inventory have created perfect conditions for investors to generate returns through new construction. Brokers also have a great opportunity to expand their loan offerings and close more loans by branching out into construction investing. In this piece, we’ll explore some of the trends driving new construction growth in 2025, why brokers should pay attention, and how you can capitalize on new construction to grow your lending business.

The Market Shift Toward New Construction

There are several trends driving demand for new construction properties in 2025. For starters, there are still many key markets experiencing housing shortages, and identifying one of these markets can be a great opportunity for investors. Investor appetite for build-to-rent communities is also increasing, as building multiple, affordable homes can often be a smarter use of capital than building larger housing.

Also, there is still solid demand for new homes among the general population. New homes often come with newer features and are built with smarter, more efficient materials that reduce monthly ownership costs. For most buyers it’s a no brainer: if you’re paying the same amount in the long run, why not go with a newly built property?

Why New Construction Matters for Brokers

Now let’s talk about why brokers should think about expanding their loan offerings with new construction. Investors are encouraged to seek out private lenders for construction investments because banks often have strict limitations on the types of projects they’re willing to fund. Offering private construction loans allows you to meet a growing niche and provide fast, flexible funding to these investors.

New properties also present a unique opportunity for repeat business, as the investors who specialize in these projects typically complete multiple deals a year. And very often, they will return to you for long-term financing after completing construction. Last but not least, new homes tend to come with larger property values, which mean larger loan amounts and bigger commissions for you as a lending partner.

Financing New Construction: What Brokers Need to Know

There are several different types of construction loans, and it pays to know the differences so you can recommend the right program to clients. First, there are loans for land acquisition and also loans for the material and labor costs building of a property (commonly called ground-up construction). Ground-up construction loans can be divided into two types: construction-to-permanent or construction only. Construction-to-permanent varieties allows investors to easily transition to long-term financing while reducing loan closing costs. With either type of construction loan, funds are typically distributed in a series of payments called “draws”. Each draw typically provides funding to cover the various phases of a new construction project. For this reason, it’s important for your client to submit a detailed scope of work and budget with a loan application.

How Brokers Can Position Themselves for Success

The best way to position yourself for success is by laying the foundation of a successful construction financing system. Partner with reputable wholesale lenders who have a proven track record of funding construction projects, and who value communication and responsiveness to help give your clients a positive loan experience. It also helps to have a list of trusted builders and developers you can recommend to clients to ensure a smoother construction process.

Then, utilize creative marketing strategies to connect with construction investors specifically. You can market yourself as a broker who specializes in construction on social media, for instance. Local real estate groups on Facebook can be a great place to meet potential clients. You can also attend construction-specific real estate conferences to meet some of these investors face-to-face.

The Bottom Line for 2025

In summary, the brokers who lean into new construction now will be in a good place to capitalize on the growing demand for this asset class that’s set to come. It’s also important to partner with a qualified wholesale lender that can provide you with a variety of loan programs which meet the complex needs of these projects. At the same time, do not overlook the importance of reliability and communication when choosing a lending partner.

To supercharge your construction deal pipeline, be sure to spend time understanding the dynamics of new construction in the areas you lend in. You can use that expertise to make relevant suggestions to clients, and then you can also market yourself as a construction specialist to better reach your intended audience. For the brokers who take time to set themselves up for success, new construction can become a strong source of income for their lending business.

RCN Capital

To help your clients maximize the returns on their next investment, partner with a lender that can provide you with the best leverages and rates. RCN Capital lends to real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate investors and lending partners. If you are looking to offer new construction financing to your clients, RCN Capital has competitive loan options and an award-winning broker referral program available to partners.