Construction costs up 11% since 2023

U.S. construction prices are higher than they were in 2023, and the increase is large enough to keep squeezing housing and commercial projects. (fred.stlouisfed.org) The Producer Price Index for new nonresidential building construction reached 173.61 in March 2026, up from about 156.4 in March 2023. That works out to roughly an 11% increase over three years. (fred.stlouisfed.org) The U.S. Census Bureau tracks separate construction price indexes for single-family houses under construction and multifamily units under construction, a sign that builders and economists treat build costs as a distinct inflation problem. (census.gov) Those higher costs are showing up in housing development decisions. In the National Multifamily Housing Council’s March 2025 survey, 58% of respondents reported construction delays and 75% said deals were being repriced. (nmhc.org) Developers in that survey also pointed to economics, not labor shortages, as the main brake on new starts. Economic uncertainty and project feasibility were each cited by 68% of respondents as reasons starts were delayed. (nmhc.org) Project cancellations were already rising before the latest 2026 data point. ConstructConnect’s Project Stress Index increased 1.1% in March 2025 and stood 13.7% above 2021 levels, with a 9.5% jump in abandonments that month. (constructiondive.com) Private projects were the weak spot in that data. ConstructConnect said the number of private projects put on hold more than doubled over 12 months, rising 110% from March 2024. (constructiondive.com) Contractors were also warning that policy could push costs higher still. The Associated General Contractors of America said on March 3, 2025 that new tariffs on goods from Canada, Mexico and China were likely to make projects more expensive and lead to more delays or cancellations. (agc.org) That helps explain why an “11% since 2023” figure keeps surfacing in industry discussions. The price rise is real in federal data, and builders say the combination of financing costs, repricing and policy risk is still slowing what gets built. (fred.stlouisfed.org) (nmhc.org) (agc.org)