Building Costs Skyrocket Over the Past 12 Months

Filed in Advocacy, Housing Affordability, Material Costs by on June 4, 2021

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.

NAHB Senior Economist Paul Emrath provides more analysis in this Eye on Housing blog post.

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  1. HAC News: June 10, 2021 – Housing Assistance Council | June 10, 2021
  1. Paul McGovern says:

    Why say “over the past 12 months” when it has actually occurred over the past 7 months … just since Biden was “elected/appointed” President ?

    • Brian Popiel says:

      Because that isn’t remotely close to the truth. Lumber has been spiking for a year. I had multiple price increases on roofing, drywall, steel, and of course labor well in advance of Election Day.

      NAHB has to work with politicians on both sides of the aisle, so if they become ideologues its impossible for them to represent their membership.

  2. Chester Carthel says:

    Quite the deceptive headline, “Building Costs Skyrocket over the Past 12 Months.” Yet, the chart indicates it’s really since the last seven months with exponential increases since Nov. 2020.

  3. Virgil Wulfson says:

    There is so much discussion of lumber price increases that other material cost increases are being overlooked. Trim prices have as much as doubled on many items, and are in very short supply, interior door prices have gone up 50%+, appliances are still in short supply and are going up, drywall materials are on the increase, and many other materials to a lesser extent. Rising fuel cost are also causing increased cost across the board.

  4. robin says:

    Not only have the prices increased, but once again, we are running into shortages..ie, wood mouldings