For several years, many have waited for building costs to quit skyrocketing before starting their dream home: the wait is over.  In 2023, several key building materials costs dropped significantly, nudging many savvy property owners to get off the sidelines and begin their building process in 2024. Home construction is composed of several major materials inputs, but some of the key ones are lumber, gypsum (sheetrock), steel and concrete.   According to the latest Producer Price Index (PPI) report, growth in the average price of materials inputs to residential construction (excluding energy) fell from 15% in 2022 to 1.3% in 2023.   

For the first time in several years, three major components of home construction had cost declines in 2023: Softwood Lumber (31%), Gypsum (2%) and Steel (16%) while others such as concrete were declining in the final 2 months of the year.  The PPI for softwood lumber declined 2.3% in December and has fallen 14.5% over the past five months of the year.   

Overall, cost of home construction nudged up slightly (1%) during the year but that’s well below the recent years’ 15%+ increases and with the end-of-year trends, so far this year looks like it could be a window of opportunity for those trying to build before prices inevitably spike again.  The chart below shows overall historical PPI year-over-year trends:

As history has shown, the current steep decline in price increases is likely to be short-lived so if you’re thinking of building in the next few years, don’t miss this window.  To learn more, reach out to one of our CR Realty agents or contact one of our Preferred Builders.