Residential Construction Costs Surge

Residential construction costs inched up in February, according to an analysis of the Bureau of Labor Statistics's Producer Price Index from the National Association of Home Builders. The price index for inputs to new residential construction—which includes the price of goods and services—rose by 0.7% in February and was up by 3.4% from the year prior.

The price of goods used in new residential construction was up by 1.1% month-over-month and 3% from February 2025, while the price of services was up 0.1% month-over-month and up by 4.2% from the same month last year.

Building material prices have seen the most growth

When it comes to inputs to goods and services, goods make up the majority of the price inputs, representing about 60% of this category. The input goods to residential construction index breaks down into two separate components: one measuring energy inputs and one measuring building materials and other remaining goods. Building materials make up about 93% of this separate category, and they are largely the cause of the increases seen in February.

Building material prices were up 0.6% in February and up by 3.5% from the same time last year. The largest year-over-year price increases continue to show up in metal products, especially in metal molding and trim, which spiked by 61.7% year-over-year. Prices for metal windows also grew by more than 20% year-over-year. 

When it comes to services, trades recorded the most significant increase

The price index for service inputs to residential construction can be broken down into three separate components: trade services; transportation and warehousing; and services excluding trade, transportation, and warehousing.

With a share of 60%, trade services makes up the bulk of the input to services category. Compared with a year ago, the trade services component increased by 5.8%.