New home construction in unincorporated Walker County slowed in 2025 as rising construction costs pushed prices higher, but the year still ranked as the third strongest on record for the county.
According to the Walker County Planning Office, 244 permits were issued last year for new single-family homes, an 11 percent decline from 2024, when 276 permits were pulled. Through July, 2025 was on pace to exceed the previous year, but activity fell off during the final five months.
“Construction costs and market uncertainty slowed new home starts in the second half of 2025,” said Jon Pursley, the county’s director of planning. “However, permit levels remain well above historical averages, and we expect steady activity to continue as market conditions improve.”
Most of the new construction occurred in unincorporated areas near Rossville, Rock Spring and LaFayette. The Rossville district led the county for the third consecutive year, with 87 permits issued. That district includes several subdivisions near Happy Valley Road and continues a rebound from 2022, when only five new homes were built on the north end of the county.
Builders also began construction on 57 homes in the Rock Spring area and 48 homes near LaFayette. Approximately 43 permits each were issued in the Chickamauga and Rising Fawn districts during the year.
While the number of homes declined, construction costs rose sharply. The average size of a new home built in unincorporated Walker County fell by 114 square feet to 2,405 square feet in 2025. At the same time, the average construction cost increased by $91,489 to $359,119, driven by higher material and labor costs.
Despite fewer permits, the total valuation of new homes built in 2025 topped $87 million, an 18 percent increase over the previous year.
Higher costs for new construction also pushed many buyers toward existing homes. Data from Greater Chattanooga Realtors shows that 690 of the 807 homes sold in Walker County last year were previously built houses, with an average sale price of $236,517.
County officials remain optimistic about the outlook for 2026, citing a growing number of land disturbance permits issued for new subdivisions as a sign that new home construction could rebound in the coming year.