Material costs increased by 6.7% over the previous year, according to results from the survey for the July 2026 NAHB/Wells Fargo Housing Market Index (HMI).
A large majority (72.9%) of the builders responding to the survey reported that their cost of materials for the same house increased by up to 15% over the past year (at the time of the survey in early July). The most common response (28.4% of builders) was that material prices increased by 5% to 9.99%, followed by 22.4% who indicated a less than 5% change, and 22.1% who indicated 10% to 14.99%.
The median was an annual increase of 6.7% in material costs for the same house. This matches the 6.7% annual increase in in the price of goods (including energy) used in new residential construction reported by NAHB in its recent post on the July Producer Price Index. If energy is excluded, the PPI for goods used in new residential construction increased by 5.0% over that period.
Not all builders experienced the same increase, however. According to the HMI survey, the median annual increase in material prices declines regularly with the size of the builder: from a high of 9.1% for builders who started 5 or fewer homes in 2025, down to only 1.8% for builders with 100 or more starts.
Several reasonable explanations for this tendency exist. For example, larger builders may have greater ability to stockpile materials when they anticipate price increases. Larger builders may also have longer-term contracts with suppliers, locking in current prices for an extended period. Finally, larger builders may be more likely to have special relationships with certain suppliers, allowing them to negotiate deferred price increases.
The price of materials is important, but it is only one of several factors creating housing affordability challenges in the U.S. Others include relatively high mortgage rates, shortages of skilled construction labor, and several different types of regulatory costs.