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
Sep 17, 2025
Housing Starts Remain Soft Ahead of Fed MeetingOverall housing starts decreased 8.5% in August to a seasonally adjusted annual rate of 1.31 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
Sep 16, 2025
Tradeswomen Paving Their Own WayNAHB spoke with Professional Women in Building (PWB) members Elyse Adams and Brittney Quinn about their career paths in the trades and how PWB has positively influenced their journeys.
Latest Economic News
Sep 17, 2025
The Fed Cuts and Projects More Easing to ComeAfter a monetary policy pause that began at the start of 2025, the Federal Reserve’s monetary policy committee (FOMC) voted to reduce the short-term federal funds rate by 25 basis points at the conclusion of its September meeting. This move decreased the target federal funds rate to an upper rate of 4.25%.
Sep 17, 2025
Housing Starts Remain Soft Ahead of Fed MeetingChallenging affordability conditions continue to act as headwinds for the housing industry, but the sector could see lower interest rates in the near future with the Federal Reserve expected to cut short-term interest rates this afternoon.
Sep 16, 2025
Builder Confidence Steady but Future Sales Expectations Hit Six-Month HighBuilder sentiment levels remained unchanged in September but lower mortgage rates and expectations that the Federal Reserve will soon cut the federal funds rate led to higher future sale expectations in the coming months.