2025 was one of the most interesting construction markets in modern times, and it doesn’t look like things will settle down very much in 2026. Church leaders and leadership teams need to understand what is happening in the market and how ongoing changes will affect how their churches grow and expand this year.
Before I get into it, I want to be very clear about one thing: this is NOT a political article. In writing this, my research was taken from a variety of credible sources (included below). My goal isn’t to take a stance. It’s to provide balanced information that is genuinely helpful in making major church construction and church renovation decisions in 2026.
Sources: This article includes data found on multiple reputable sites, including American Institute of Architects, New York Times, JP Morgan Chase, ConstructionConnect, Commercial Real Estate Development Association, Associated Builders and Contractors, Federal Reserve Economic Data (FRED), and more.
When I step back and look at everything at once, it’s clear that there are two very important data points in determining what has happened and what will be happening in the construction industry between 2025 and 2026:
One of these looks at the total volume of all projects under construction in the US at any given moment. The other considers potential resources that could require funding for church projects before long.
We wrote an article in June of last year called Expand Smarter, which highlighted the impact of tariffs and the labor market on construction prices. Unfortunately, our projections were right on the money.
In June of last year, there were approximately $85.9B of Total Construction Volume. That number fell to $45.7B by September. This was also a decrease of 22.5% from September of 2024, despite a 101% ($11B) increase in spending on data center construction volume.
These projects had their pricing locked in before the start of 2025, and thus, they were not affected by the then-current state of construction pricing. In short, there was an incredibly steep decline in projects under construction in 2025.
This was because of stalled and canceled projects, a reality that was due to the instability in construction pricing and uncertainty in the construction labor market. There was also a slight uptick in interest rates, as well as a nationwide “freezing” of private equity funds available for these types of projects.
The Architectural Billing Index (ABI), which predicts total construction volume, also took a major hit. In fact, when it came to nonresidential construction, the ABI declined every single month last year.
What’s interesting, and important for the church, is that multifamily units, which have been one of the hottest sectors in real estate for years, showed the steepest declines. This was despite the enormous housing shortage in the US, which is estimated to be between 4.7M and 7.1M units short.
With every challenge lies opportunity. I’m fortunate to have one of the larger developers in the Atlanta market as a mentor, and one of my favorite things he says is “real money is made in down markets.”
Church leaders, it’s important to understand a key factor when you hear about a downturn in the economy. Church growth is often countercyclical to economic growth. When things are tough on our bank accounts, churches often see revival. That means there’s a good chance that the current state of the market will provide opportunities for innovative churches to expand — if they can do so with intelligence, good stewardship, and wise decision-making.
The projections for this year in construction are grim. According to the AIA, the only sector that is not declining is data centers. Education, retail, hospitality, healthcare, multifamily, and many other areas are taking significant hits in architectural billing and planned projects.
There were two major concerns here that we outlined last year. One is a continually growing deficit in the labor market due to an untrained domestic workforce. The other is the impact of deportation on our foreign-born labor force, which comprises 62% of our total labor force in the construction industry.
In a normal market, between this and tariffs, this would drive construction costs through the roof. The only thing keeping construction prices somewhat in place right now is the absolute collapse of demand in the industry.
That being said, firms such as JP Morgan and others are calling a lot of this a “correction” in the market due to unsustainable rapid growth from 2020 to 2025. Many think a “downturn” in the market will encourage private equity firms, which have largely pulled out of the commercial real estate (CRE) market, to make a comeback. They expect PEs to restart their investments into the housing market, multifamily, institutional, and a repurposed office market (which currently has a vacancy rate over 20%).
Understanding the larger labor and construction markets is one thing. But what tangible, church-specific takeaways are in the data that leaders can use to make smart choices for their ministries in the year ahead? Let’s look at a few of the big things that jump out.
You will hear people, including myself, state that “inventory is scarce” when it comes to nonresidential real estate. From one perspective, this is true. A more nuanced explanation is that our inventory hasn’t changed as much as our definition of inventory has changed. We used to consider inventory as what was on the public market (CoStar, Loopnet, etc.). Yes, those listings are fewer because of the uncertainty in the market and the impact on the buyer pool. However, there are still a lot of people willing to sell their properties at the right price.
If you find land or an existing facility on Loopnet or CoStar, it’s likely because no one else wanted it. Due to the uncertainty of the market last year, it was simply a bad time for land owners and CRE firms to sell. Buyers didn’t have access to capital, and that drove down prices, pushing sellers to hold out. Despite the sluggish situation, we helped our clients close on close to $100M in real estate last year, but it’s telling that only one of those acquisitions was listed on the market.
We’ve written extensively about this topic in the past, but it deserves a 2026 update. The capital “C” Church continues to evolve into a modern multisite model of having a larger number of smaller campuses (versus a small number of large campuses). Add in the pressure of aging leadership within mainline denominational churches, and the idea of church mergers will continue to be a primary growth option. While there is no such thing as a free building, this growth strategy is very affordable and streamlines a lot of the grunt work of a more traditional new campus.
Remember in 2012, after the recession, when it felt like there were 100k SF retail buildings and grocery stores for sale around every corner? It isn’t as drastic, but some of those opportunities are coming back around. Just within the past few months, we’ve helped a number of churches purchase buildings from large-scale movie theater chains that are divesting their real estate assets, as well as some major big-box chains. Again, you likely won’t find those opportunities on Loopnet, but they are there if you have the right connections.
Since 2020, land has been all but impossible to find at a reasonable price due to the enormous surge in demand for multifamily units. Unfortunately for church growth strategy, developers investing in multifamily construction are looking for the exact same acreage and locations as churches. With the slowing of multifamily development, land should be more available. However, this is still the absolute most expensive form of development and should be a last resort for growing churches. It costs the most money, takes the most time, and has the most unexpected problems. And like retail, almost all of these properties will trade off-market.
The activated spaces conversation has taken off over the past few years. The momentum means more churches are using their facilities and their land to not just be a great church in the community, but a great church for the community.
This comes from using their existing spaces and underutilized land to bring in passive revenue. It supercharges outreach, too, helping you meet people on a Tuesday afternoon who are not coming on Sunday morning.
Building activation isn’t theoretical. It works. We had two churches last year cross the $1M mark for passive annual NET revenue, with more expected to cross that threshold this year. Here are a few examples of churches using their facilities to impact their community:
This strategy not only reaches thousands more people within the community, but it also contributes hundreds of thousands or millions of dollars to help offset the annual facility expenses.
If you’re looking for ways to help your church building and real estate financially support your ministry (and not the other way around), it’s time to take stock of your resources. That’s why we’ve set up Ministry Solutions Group’s Free Analysis. This is a great way to turn vision into strategy through a detailed understanding of your giving trends, attendance data, and more. Our team can help you understand what you can afford, how to fund it, and where to plan growth in the year ahead. Reach out, and let’s start a conversation that leads to greater clarity for your church’s next steps in 2026.