Building Costs Skyrocket Over the Past 12 Months
Building material costs have soared 26.1% on average over the past 12 months, according to a recent survey of single-family builders asking how much costs have increased for the same house over the last year. It’s no coincidence that this same May survey for the NAHB/Wells Fargo Housing Market Index reveals that a record number of builders reported material shortages across the board.
A plurality of builders (28%) reported that material costs increased by 20-30% over the past year. Another 15.9% indicated that costs increased by 30-40%; 5.9% said costs rose by 40-50% and 15.2% indicated that their costs had soared by 50% or more.
On average, the 12-month increase in material costs for the same house was 26.1%, by far the highest percentage cost increase ever recorded in an NAHB survey. The previous record was 6.1% in 2017.
Material availability and costs are one of several factors, including the cost of regulation and a general shortage of construction labor, limiting the supply of housing, particularly for the entry-level market where additional inventory is badly needed.
Latest from NAHBNow
Sponsored Content
Apr 18, 2025
Empowering New Home Buyers and Builders with Data and ExposureHomebuyers are increasingly relying on a research-driven approach to their new home buying experience. Homes.com is meeting that need with its new home marketplace.
US Economy | Material Costs
Apr 17, 2025
Trade War Will Create Further Economic and Financial Market StressNAHB Chief Economist Robert Dietz provided this economic and housing industry overview in the bi-weekly newsletter Eye On the Economy.
Latest Economic News
Economics
Apr 17, 2025
Housing Starts Decline Amid Economic UncertaintyConstrained housing affordability conditions due to elevated interest rates, rising construction costs and labor shortages led to a reduction in housing production in March.
Economics
Apr 16, 2025
Builder Confidence Levels Indicate Slow Start for Spring Housing SeasonGrowing economic uncertainty stemming from tariff concerns and elevated building material costs kept builder sentiment in negative territory in April, despite a modest bump in confidence likely due to a slight retreat in mortgage interest rates in recent weeks.
Economics
Apr 14, 2025
Where Do Builders and Remodelers Buy Building Products?The most common sources for products used in home building and remodeling are specialty retailers, lumber yards, and wholesale distributors, according to two recent NAHB surveys. The surveys include one of single-family homebuilders in the October 2024 NAHB/Wells Fargo Housing Market Index (HMI) and one of remodelers in the Q3 2024 NAHB/Westlake Royal Remodeling Market Index (RMI). Both surveys asked respondents where they purchase building products, regardless of who ultimately purchases them (themselves or subcontractors).