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Prices for inputs to new residential construction were 10.3% higher in September than a year earlier, according to a Bureau of Labor Statistics index analyzed by the National Association of Home Builders. Building material prices rose 5.5% year over year, while energy and service costs recorded sharper increases.
Prices for inputs to new residential construction were 10.3% higher in September than a year earlier, according to Bureau of Labor Statistics data analyzed by the National Association of Home Builders (NAHB). Building material prices increased 5.5% year over year, the highest rate since December 2022, while energy and services costs rose more sharply.
The combined index for goods and services used in new residential construction rose 2.0% in September, following a 0.9% increase in goods input prices in August. Goods prices, including energy, climbed 1.8% over the month and were 9.7% above their level a year earlier. Service input prices rose 2.2% in September and were up 11.3% year over year.
Energy had the largest reported monthly price movements. Energy input prices rose 13.0% in September and were 64.1% higher than a year earlier. No. 2 diesel fuel prices increased 24.2% during the month and stood 115.2% above the year-earlier level. Unleaded regular gasoline prices rose 13.0% in September and were up 66.1% year over year.
Among building products, particleboard and fiberboard prices rose 3.5% in September and were 7.8% higher than a year earlier. Softwood veneer and plywood increased 2.7% over the month and 15.9% over the year. Mineral wool rose 2.8% monthly and 1.6% annually. On the services side, transportation and warehousing prices were up 19.3% from a year earlier, and trade services were up 14.0%; other services increased 3.1%.
Higher Costs Reach Homebuilding Inputs
The index tracks the prices of goods and services used in new residential construction, not the final sale price of a home. Still, persistent increases in these input costs can put pressure on builders’ budgets and project planning. Companies may face higher expenses for materials, fuel, shipping, warehousing and trade services, with the effect varying by project and supplier.
The September figures also show why the overall increase matters beyond lumber or other building products alone. Building material prices were up 5.5% year over year, but the broader construction-input index rose 10.3%, reflecting significant increases in energy and services as well. The data do not establish how much of those costs builders will pass on to buyers, or whether particular projects will be delayed or repriced.
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September’s Cost Pressures by Category
The September report presents several related but distinct measures. The 10.3% annual increase applies to the combined index of goods and services used in new residential construction. Goods, including energy, were up 9.7% year over year, while services were up 11.3%. The separate building-material measure increased 5.5% from a year earlier.
The report’s comparison for building materials puts September’s 5.5% annual increase at its highest level since December 2022, when the year-over-year increase was 8.0%. For service inputs, the 11.3% annual increase was the highest since April 2022, when that measure rose 17.7%. These are annual comparisons; they should not be confused with the month-to-month changes also reported for September.
How Costs Will Affect Projects
The figures do not specify how much of the input-cost increases will be absorbed by builders, passed on through home prices, or reflected in contract terms. They also do not quantify the impact on construction starts, project schedules, or housing affordability. Outcomes can differ according to materials used, supplier arrangements, location and the timing of purchases.
The supplied report gives September changes and year-over-year comparisons but does not provide a forecast for the coming months or explain the causes behind each price movement. The price data alone cannot show whether the increases will continue, ease or reverse.
Watch Upcoming Construction Price Data
The next relevant development will be updated price data for construction inputs, which can show whether September’s increases persist across goods, energy and services. Builders, suppliers and retailers may also track fuel, transportation and material prices as they set bids and plan purchases. The source report does not identify a specific date for the next release or offer a forecast.
Key Questions
How much did residential construction input prices rise in September?
The combined index for goods and services used in new residential construction rose 2.0% in September and was 10.3% higher than a year earlier.
Did building materials rise by 10.3%?
No. The 10.3% figure applies to the combined construction-input index, including goods and services. Building material prices specifically rose 5.5% year over year and 0.4% in September.
Which costs increased most sharply?
Energy input prices rose 13.0% in September and 64.1% year over year. No. 2 diesel fuel rose 24.2% for the month and 115.2% from a year earlier. Among services, transportation and warehousing prices were up 19.3% year over year.
Does the data mean new homes will cost 10.3% more?
No. The index measures prices for inputs used in new residential construction, not the final price of homes. It does not show how much builders will pass through to buyers or how the reported increases will affect individual projects.
Source: rss
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