Elizabeth Fenton
By Elizabeth Fenton, WBA communications coordinator
On April 29, a top national economist took the stage at the Alliant Energy Center and opened with the following remark: “The economy today is good, not great.”
Robert Dietz is the chief economist at the National Association of Home Builders. He leads a team of 12 economists and serves as the nation’s leading analyst of the residential construction industry. He spoke to bankers, policymakers, builders, realtors, and business leaders at the 2026 Wisconsin Economic Forecast Luncheon in Madison.
“The economy has certainly suffered a lot from what we’ve called headline risks,” Dietz shared. “Volatility — whether you think it is a good thing or a bad thing — is a feature of the Trump 2.0 era.”
He pointed to basic measures of the state of the economy, noting 2.1% GDP growth in 2025 — underperforming the 3% growth anticipated following nationwide investment in the tech sector. What’s more, Dietz noted that his organization downgraded its 2026 forecast to 1.9%.
“We started the year saying recession risk was around 30%,” explained Dietz. “We have now raised that to 40%, and you can find plenty of economists who think the recession risk measures at 50%.”
One of the luncheon’s main focuses was housing and its connection to inflation. Dietz maintained that shelter costs continue to be one of the largest contributors to inflation in the United States.
“For the last three years, more than 50% of the gain in consumer inflation in the CPI has been housing, rent costs, and homeownership costs,” Dietz explained. “The cost of construction is too high relative to household incomes.”
Shelter inflation has been growing even faster than overall inflation. If the Fed wants to see inflation return to 2%, there’s one simple solution: increase the number of attainable houses for sale.
“My message to policymakers in D.C. and the state houses everywhere is to reduce the cost of construction and increase the amount of available inventory of housing,” said Dietz.
He further contended that at the crux of the nation’s housing shortage is a supply-side problem driven by labor shortages, regulatory costs, and rising construction costs. About a quarter of a typical new build single-family home’s purchase price is made up in regulatory costs.
“Taxes, fee permits, delays, land you can’t build on — there’s a whole stack of problems,” emphasized Dietz.
Despite those challenges, Wisconsin — and the broader Midwest — is a bright spot in the national housing market. While the national market dipped 7%, Wisconsin grew by 3% in single-family home building. Older, wealthier buyers are stabilizing the market in the Midwest, “even more than Texas and Florida,” Dietz explained.
A panel discussion followed featuring Wisconsin Department of Workforce Development (DWD) economist Scott Hodek and Bank Five Nine President and CEO Tim Schneider.
Despite the uncertainty that Dietz outlined to luncheon attendees, Schneider opened the discussion by saying he remains “modestly optimistic” about Wisconsin’s economy.
“I think the economy in the state is actually in pretty good condition,” said Schneider. He specifically noted how the housing market continues to expand in and around Oconomowoc. “We did nearly $400 million in activity last year in our mortgage department.”
Both Hodek and Schneider agreed that their respective fields are experiencing labor shortages, and these challenges persevere as some of Wisconsin’s longest-term economic concerns. Hodek shared that DWD continues to have trouble filling open skilled positions.
“We’ve seen offshore and automation hits throughout the last couple decades. We are seeing rising productivity. However, those don’t necessarily indicate the health of the industry.”
On a brighter note, Hodek praised the strong workforce training pipeline in the state. The federal government recently awarded Wisconsin a $7.3 million grant supporting the development of advanced manufacturing and AI skills.
“We do have a really good education system,” shared Hodek. “That’s not just K-12 and the UW system, but it’s also apprenticeship programs, registered apprenticeships, and youth apprenticeships.”
Schneider summed up the general uneasiness from recent headlines that continue to take swings at consumer and business confidence.
“The headline uncertainty these days is probably the biggest challenge we are facing. They keep coming at us,” he explained. “We had the presidential election. Then there were tariffs. Now there is the Iran war. There is always something that is preventing us from returning to normalcy.”
Despite the ongoing national and global challenges that may cause some consumers to pause, the luncheon’s speakers carried a message that was overall calm rather than alarmist. Many attendees left with the takeaway to lean into stability and long-term planning during these periods of slower growth.
