Building materials made of steel, copper and other metals had some of the highest price growth rates in the U.S. in early 2025 in comparison to the previous year. The growth rate of the cost of several construction materials was slightly lower than in late 2024. It is important to note, though, that the figures provided are Producer Price Indices, which cover production within the United States, but do not include imports or tariffs. This might matter for lumber, as Canada's wood production is normally large enough that the U.S. can import it from its neighboring country. Construction material prices in the United Kingdom Similarly to these trends in the U.S., at that time the price growth rate of construction materials in the UK were generally lower 2024 than in 2023. Nevertheless, the cost of some construction materials in the UK still rose that year, with several of those items reaching price growth rates of over **** percent. Considering that those materials make up a very big share of the costs incurred for a construction project, those developments may also have affected the average construction output price in the UK. Construction material shortages during the COVID-19 pandemic During the first years of the COVID-19 pandemic, there often were supply problems and material shortages, which created instability in the construction market. According to a survey among construction contractors, the construction materials most affected by shortages in the U.S. during most of 2021 were steel and lumber. This was also a problem on the other side of the Atlantic: The share of building construction companies experiencing shortages in Germany soared between March and June 2021, staying at high levels for over a year. Meanwhile, the shortage of material or equipment was one of the main factors limiting the building activity in France in June 2022.

The price expectations in the construction sector of the European Union started increasing slightly in the second half of 2024. That price growth, however, seems to be more moderate than previous price hikes. That happened after price growth expectations fell from its peak in 2022. In May 2025, the index reached a value of 3.1, which indicates that there were slightly more respondents expecting the price to keep rising than the ones expecting it to fall.

Building construction price indexes (BCPI), percent change, by type of building and construction division. Quarterly data are available from the first quarter of 1982. The table presents quarter-over-quarter and year-over-year percentage changes for various aggregation levels. The base period for the index is (2017=100).

Construction Output Price Indices (OPIs) from January 2014 to December 2024, UK. Summary.

Netherlands - Construction cost index was EUR121.60 points in March of 2025, according to the EUROSTAT. Trading Economics provides the current actual value, an historical data chart and related indicators for Netherlands - Construction cost index - last updated from the EUROSTAT on May of 2025. Historically, Netherlands - Construction cost index reached a record high of EUR121.60 points in March of 2025 and a record low of EUR62.90 points in March of 2000.

Graph and download economic data for Producer Price Index by Commodity: Construction (Partial): New Industrial Building Construction (WPU80110401) from Jun 2007 to May 2025 about buildings, construction, new, commodities, PPI, industry, inflation, price index, indexes, price, and USA.

Graph and download economic data for Producer Price Index by Industry: New Office Building Construction (PCU236223236223) from Jun 2006 to May 2025 about buildings, construction, new, PPI, industry, inflation, price index, indexes, price, and USA.

The construction output price in the United Kingdom has reached an annual growth rate of two percent in September 2024. Construction costs have been increasing at a lower rate than in 2022 and 2023. The year-over-year growth rate reached over 10 percent in May and June of 2022. Public and private housing was the construction segment with the highest output price increase. How have material costs developed over the years? Several factors influence construction material costs, including supply and demand, regulatory requirements, and transportation logistics. Manufacturing efficiency and global trade policies also play a big part, along with economic factors like inflation and currency fluctuations. In June 2022, the price of construction materials for new houses in the UK were 53 percent higher than in 2015. What is the largest component of those costs? Labor costs are often one of the largest expenses in construction projects. That is due to the skilled nature of the work, which has a high demand for specialized trades. The construction sector's labor costs accounted for around 58 percent of the sector's earnings in the United Kingdom in 2023. In the past years, the size of labor costs as a share of the construction sector rose by more than three percentage points, indicating that labor costs have increased at a faster rate than the overall revenue of the industry.

As of May 2025, the monthly price index for construction materials in Japan stood at ***** points. This represented an increase of *** index points compared to the previous month.

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US Residential Construction Market Size 2025-2029

The US residential construction market size is forecast to increase by USD 242.9 million at a CAGR of 4.5% between 2024 and 2029.

The Residential Construction Market in the US is experiencing significant growth driven by increasing household formation rates and a rising focus on sustainability in new projects. According to the latest data, household formation is projected to continue growing at a steady pace, fueling the demand for new residential units. This trend is particularly evident in urban areas, where population growth and limited space for new development are driving up demand. Meanwhile, the emphasis on sustainability in residential construction is transforming the market landscape. With consumers increasingly prioritizing energy efficiency and eco-friendly features in their homes, builders and developers are responding by incorporating green technologies and sustainable materials into their projects.
This shift not only appeals to environmentally-conscious consumers but also offers long-term cost savings and regulatory compliance benefits. However, the market is not without challenges. Skilled labor shortages continue to pose a significant hurdle for large-scale residential real estate projects. The ongoing shortage of skilled laborers, including carpenters, electricians, and plumbers, is driving up labor costs and delaying project timelines. To mitigate this challenge, some builders are exploring alternative solutions, such as modular construction and automation, to streamline their operations and reduce their reliance on traditional labor sources. The Residential Construction Market in the US presents significant opportunities for companies seeking to capitalize on the growing demand for new housing units and the shift towards sustainability.
However, navigating the challenges of labor shortages and rising costs will require innovative solutions and strategic planning. By staying informed of market trends and adapting to evolving consumer preferences, companies can effectively position themselves for success in this dynamic market.

What will be the size of the US Residential Construction Market during the forecast period?

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The residential construction market in the United States continues to exhibit dynamic activity, driven by various economic factors. Housing supply remains a key focus, with ongoing discussions surrounding the affordable housing trend and efforts to increase inventory, particularly for single-family homes and new constructions. Mortgage and federal funds rates have an impact on residential investment, with fluctuations influencing buyer decisions and construction costs. The labor market plays a crucial role, as workforce availability and wages affect both housing starts and cancellation rates. Inflation and interest rates, monitored closely by the Federal Reserve, also shape the market's direction. Recession risks and economic conditions influence construction spending across various sectors, including multifamily and single-family homes.
Federal programs, such as housing choice vouchers and fair housing initiatives, continue to support home buyers and promote equitable housing opportunities. Building permits and housing starts serve as essential indicators of market health and future growth, with some sectors experiencing double-digit growth. Overall, the residential construction market in the US remains a significant economic driver, shaped by a complex interplay of economic, demographic, and policy factors.

How is this market segmented?

The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in 'USD million' for the period 2025-2029, as well as historical data from 2019-2023 for the following segments.

Product

  Apartments and condominiums
  Luxury Homes
  Other types


Type

  New construction
  Renovation


Application

  Single family
  Multi-family


Construction Material

  Wood-framed
  Concrete
  Steel
  Modular/Prefabricated


Geography

  US

By Product Insights

The apartments and condominiums segment is estimated to witness significant growth during the forecast period.

The residential construction market in the US is experiencing growth in both the apartment and condominium sectors, driven by the increasing trend toward urbanization and changing lifestyle preferences. Apartments, typically owned by property management companies, and condominiums, with individually owned units within a larger complex, contribute significantly to the market. The Federal Reserve's influence on the economy through the federal funds rate and mortgage rates impacts borrowing rates and home construction activity. The affordability of housing, particularly for younger generations, is a concern due to factors such as inflation, labor market conditions, and savings

Italy - Construction cost index was EUR114.10 points in December of 2023, according to the EUROSTAT. Trading Economics provides the current actual value, an historical data chart and related indicators for Italy - Construction cost index - last updated from the EUROSTAT on June of 2025. Historically, Italy - Construction cost index reached a record high of EUR114.70 points in December of 2022 and a record low of EUR47.70 points in March of 1990.

Graph and download economic data for Producer Price Index by Commodity: Special Indexes: Construction Materials (WPUSI012011) from Jan 1947 to May 2025 about materials, construction, commodities, PPI, inflation, price index, indexes, price, and USA.

During the observed period, the data Portugal's new housing construction cost index reached nearly *** points by January 2025, reflecting a significant increase from the base year of 2021. This overall rise in construction costs includes increases in the indexes of both materials and, especially, labor cost in the construction sector. Trends in residential construction The proportion of one-dwelling residential construction in Portugal has grown steadily since 2017, accounting for ** percent of new builds in 2023. This trend coincides with a decrease in mostly non-residential construction, which fell to its lowest share of approximately ** percent in the same year. The northern region of Portugal has emerged as a hotspot for new housing, completing over ****** new dwellings for family housing in 2023, while Greater Lisbon saw a preference for three-bedroom dwellings in new constructions. Housing market dynamics Despite the growing construction costs, Portugal's residential property sector is performing confidently, which is reflected in rising residential construction permits. The number of permits issued for residential property construction, which had declined sharply from nearly ****** in 2007 to less than ****** in 2020, rebounded to almost ****** in 2023, an uptick that does not match Portugal’s severe housing problems.

Portugal - Construction cost index was EUR123.40 points in March of 2025, according to the EUROSTAT. Trading Economics provides the current actual value, an historical data chart and related indicators for Portugal - Construction cost index - last updated from the EUROSTAT on July of 2025. Historically, Portugal - Construction cost index reached a record high of EUR123.40 points in March of 2025 and a record low of EUR63.90 points in March of 2001.

Taiwan Construction Cost Index: Building Construction (BC) data was reported at 111.100 2021=100 in Mar 2025. This records an increase from the previous number of 110.660 2021=100 for Feb 2025. Taiwan Construction Cost Index: Building Construction (BC) data is updated monthly, averaging 78.500 2021=100 from Jan 1991 (Median) to Mar 2025, with 411 observations. The data reached an all-time high of 111.100 2021=100 in Mar 2025 and a record low of 49.270 2021=100 in Sep 1991. Taiwan Construction Cost Index: Building Construction (BC) data remains active status in CEIC and is reported by Directorate-General of Budget, Accounting and Statistics, Executive Yuan. The data is categorized under Global Database’s Taiwan – Table TW.EA019: Construction Cost Index: 2021=100.

From 2015 to the first quarter of 2024, the construction output prices of public and private housing increased by 46 percent in the United Kingdom (UK). Meanwhile, the prices of industrial buildings increased by 41 percent, and infrastructure prices by 37 percent. Housing and industrial are the segments that increased the most during that period. Balfour Beatty ranked in the past years as the construction firm with the largest revenue in the UK.

PPI: Construction: New Health Care Building data was reported at 164.313 Jun2012=100 in Mar 2025. This records an increase from the previous number of 161.588 Jun2012=100 for Feb 2025. PPI: Construction: New Health Care Building data is updated monthly, averaging 114.200 Jun2012=100 from Jun 2012 (Median) to Mar 2025, with 154 observations. The data reached an all-time high of 164.313 Jun2012=100 in Mar 2025 and a record low of 99.500 Jun2012=100 in Dec 2012. PPI: Construction: New Health Care Building data remains active status in CEIC and is reported by U.S. Bureau of Labor Statistics. The data is categorized under Global Database’s United States – Table US.I082: Producer Price Index: by Industry: Utilities and Construction.

Spain - Construction cost index was EUR119.30 points in March of 2025, according to the EUROSTAT. Trading Economics provides the current actual value, an historical data chart and related indicators for Spain - Construction cost index - last updated from the EUROSTAT on July of 2025. Historically, Spain - Construction cost index reached a record high of EUR119.30 points in March of 2025 and a record low of EUR19.10 points in March of 1980.

Sweden - Construction cost index was SEK121.20 points in March of 2025, according to the EUROSTAT. Trading Economics provides the current actual value, an historical data chart and related indicators for Sweden - Construction cost index - last updated from the EUROSTAT on June of 2025. Historically, Sweden - Construction cost index reached a record high of SEK121.20 points in March of 2025 and a record low of SEK37.30 points in March of 1990.

Denmark - Construction cost index was DKK118.00 points in March of 2025, according to the EUROSTAT. Trading Economics provides the current actual value, an historical data chart and related indicators for Denmark - Construction cost index - last updated from the EUROSTAT on June of 2025. Historically, Denmark - Construction cost index reached a record high of DKK118.00 points in March of 2025 and a record low of DKK54.20 points in March of 1995.