Are Building Costs Going Up Right Now?
Short answer for July 2026: costs are still rising, and building has slowed. Materials are up 10.5% year over year and construction wages up 4.4%, while single-family starts are down 15.7%. Every figure on this page comes from Census Bureau and BLS releases and is refreshed each time the site rebuilds.
The squeeze: inputs up, output down
The two halves of this market are moving in opposite directions. What it costs to build keeps climbing — materials up 10.5% and wages up 4.4% over the past year. What gets built keeps shrinking: starts down 15.7% and residential construction spending down 4.7%. Median new-home sale prices are down 2.7%, which means builders are not passing the full increase through.
There is one forward-looking wrinkle worth noting. Permits are up 1.1% while starts are down 15.7%. A permit is permission to build; a start is a shovel in the ground. When the two diverge like this, projects are being approved and then held — usually because financing or buyer demand is not there yet. With the 30-year fixed rate at 6.65% (Freddie Mac, 2026-08-20), that gap is the most honest single indicator on this page.
Single-family housing starts
Thousands of units, seasonally adjusted annual rate. U.S. Census Bureau via FRED, last 60 months.
Construction materials producer price index
Index, 1982 = 100, not seasonally adjusted. U.S. Bureau of Labor Statistics via FRED, last 60 months.
What this means for a cost-per-square-foot estimate
The most authoritative build-cost figure in the U.S. is the Census Bureau median contract price per square foot for contractor-built single-family houses — $171.57/sq ft excluding land, with an average of $198.33/sq ft. The catch is that it is a 2025 survey figure, and input costs have moved since.
BLS publishes two indexes tracking exactly that movement: net inputs to residential construction for goods (WPUIP2311001, +5.1%) and for services (WPUIP2311002, +4.6%), both measured from the 2025 annual average to the 2026 year-to-date average. They agree closely, which gives a defensible escalation range of 4.6–5.1%.
| Benchmark | 2025 survey | Escalated to 2026 |
|---|---|---|
| Census median contract price | $171.57/sq ft | $179–$180 |
| Census average contract price | $198.33/sq ft | $207–$208 |
| This site's mid-range tier | — | $188 |
Our mid-range tier of $188/sq ft sits between the escalated federal median ($179–$180) and the escalated federal average ($207–$208). That is where a mid-range custom build should land, and it is the check we run rather than simply asserting our numbers are current. Our basic tier is $139 and premium is $256.
An important limitation: these are input cost indexes. They capture what builders pay for materials, labour and services, not what they charge. In a slowing market builders often absorb part of an input increase rather than pass it through — which is exactly what the fall in median new-home prices suggests is happening now. Treat the escalated figures as an upper bound on cost pressure, not a market price.
Where these numbers come from
- Single-family housing starts — New Privately-Owned Housing Units Started: Single-Family Units (HOUST1F); thousands of units, seasonally adjusted annual rate. Latest 2026-07-01.
- Single-family building permits — New Privately-Owned Housing Units Authorized in Permit-Issuing Places: Single-Family Units (PERMIT1); thousands of units, seasonally adjusted annual rate. Latest 2026-07-01.
- Private residential construction spending — Total Private Construction Spending: Residential (PRRESCONS); millions of dollars, seasonally adjusted annual rate. Latest 2026-06-01.
- Construction employment — All Employees, Construction (USCONS); thousands of persons, seasonally adjusted. Latest 2026-07-01.
- Average hourly earnings, construction — Average Hourly Earnings of All Employees, Construction (CES2000000003); dollars per hour, seasonally adjusted. Latest 2026-07-01.
- Construction materials producer price index — Producer Price Index by Commodity: Special Indexes: Construction Materials (WPUSI012011); index, 1982 = 100, not seasonally adjusted. Latest 2026-07-01.
- Median sale price, new houses sold — Median Sales Price of Houses Sold for the United States (MSPNHSUS); dollars, not seasonally adjusted. Latest 2026-06-01.
- Net inputs to residential construction — goods — Producer Price Index by Commodity: Inputs to Industries: Net Inputs to Residential Construction, Goods (WPUIP2311001); index, June 1986 = 100, not seasonally adjusted. Latest 2026-07-01.
- Net inputs to residential construction — services — Producer Price Index by Commodity: Inputs to Industries: Net Inputs to Residential Construction, Services (WPUIP2311002); index, June 1986 = 100, not seasonally adjusted. Latest 2026-07-01.
Collected from the Federal Reserve Bank of St. Louis (FRED), which republishes U.S. Census Bureau and Bureau of Labor Statistics series. Figures described as a seasonally adjusted annual rate are annualised from one month and are not a count of what was built that month; agencies revise these series after first publication. Full methodology · raw JSON, free to reuse under CC BY 4.0.