Building Material Price Growth Remains Elevated Despite a Sluggish Market

Residential building material price growth continued to climb toward the end of 2025, even as the new home construction market showed signs of slowing.

According to the latest Producer Price Index (PPI) data from the U.S. Bureau of Labor Statistics (BLS), price growth for residential construction inputs has remained above 3% since June, signaling persistent cost pressures for builders and developers.

While some materials — such as softwood lumber and ready-mix concrete — have seen modest price relief, others, particularly metal products, continue to post sharp year-over-year increases. The result is a mixed but still inflationary landscape for residential construction costs.

In November, the PPI for final demand rose 0.2%, following a 0.1% increase in October. Much of this increase was driven by a rise in final demand energy, which jumped 4.6% for the month and accounted for more than 80% of the overall gain.

The price index for inputs to new residential construction rose 0.1% in November and was up 4.2% from last year. The price of goods used in new residential construction was up 0.4% over the month and 3.4% from last year. Meanwhile, the price for services was down 0.4% over the month and up 5.5% from last year.

Building material prices are now up 3.5% year over year, the largest annual increase since early 2023. Among all materials, metal products continue to stand out. Metal molding and trim prices surged nearly 50% compared to last year, underscoring ongoing supply and pricing challenges in the metals market.

However, not all materials are moving higher. Softwood lumber prices remain well below last year’s levels, and ready-mix concrete prices have also softened, likely reflecting stagnant construction spending. Despite the modest relief in prices for these materials, the broader trend suggests continued cost pressures for builders through the early part of 2026.

For a more in-depth look at the data, read this recent Eye On Housing article by NAHB Director of Tax and Trade Policy Analysis Jesse Wade.