NAHB: Building material costs climb 6.7%, squeeze small builders

Building material costs rose a median 6.7% over the past year, with the smallest homebuilders seeing the steepest increases and large production builders largely insulated, according to new survey data from the National Association of Home Builders. Cost pressures diverge by builder size Results from the July 2026 NAHB/Wells Fargo Housing Market Index survey show that 72.9% of builders saw material costs for the same house rise by up to 15% over the prior year. The most common outcome was a 5% to 9.99% jump in costs, reported by 28.4% of builders. Another 22.4% saw increases of less than 5%, while 22.1% reported increases between 10% and 14.99%, NAHB economist Paul Emrath wrote in a post on the trade group’s Eye on Housing blog. The median increase of 6.7% in material costs for a standard home tracks closely with producer price data. NAHB noted that the price of goods, including energy, used in new residential construction also rose 6.7% over the year in the July Producer Price Index. Excluding energy, those input costs grew 5%. Smaller builders take the brunt The survey found a consistent relationship between builder size and cost inflation. Median annual material cost increases f...