Home Building Costs, Q4 2026: Steel Up 23%, Lumber Up 12%, Concrete Flat

The goods that go into building a home cost 7.8% more than they did a year ago, according to the Bureau of Labor Statistics' producer price index for residential construction inputs (August 2026, the latest month available). That index is now at its highest level since at least the start of 2024.

The increase is uneven. Steel mill products are up 23.4%, copper and aluminum mill shapes are up 23.3%, and softwood lumber is up 11.8%. At the other end, ready-mix concrete is up just 2.3% and drywall is flat. Construction wages are up 4.2%.

This report breaks down what moved, why, and what it means for the project you're planning. It uses only published government data, and every figure links back to its source.

Key findings

+7.8% year over year for all goods used in residential construction (BLS PPI, Aug 2026).
Metals lead: steel mill products +23.4%, copper/aluminum mill shapes +23.3%, both now under 50% Section 232 tariffs.
Lumber: softwood +11.8% year over year and +17.9% since December, under a 10% tariff since October 2025.
Roofing is accelerating: asphalt felts and coatings +6.4% in just the last three months.
Stable: ready-mix concrete +2.3%, drywall (gypsum) +0.2%, hardwood lumber +1.7%.
Labor: construction pay averages $41.69/hour, up 4.2% (Sept 2026).

What Moved: Material Prices Through August 2026

All figures are BLS producer price indexes, which measure what producers receive for these goods. That's upstream of what you pay at the store or what a contractor bills, but it's the earliest and most reliable signal of where those prices are heading.

Material	1 year	Since Dec 2025	Last 3 months	Shows up in
All residential construction goods	+7.8%	+8.0%	+0.6%	Every project
Steel mill products	+23.4%	+22.0%	+8.9%	Rebar, structural steel, fasteners, metal roofing
Copper & aluminum mill shapes	+23.3%	+14.1%	−2.2%	Wiring, copper plumbing, aluminum windows and gutters
Softwood lumber	+11.8%	+17.9%	+3.7%	Framing, decks, sheds, additions, garages
Asphalt felts & coatings	+5.9%	+7.1%	+6.4%	Asphalt shingles, roofing underlayment
Ready-mix concrete	+2.3%	+2.3%	+0.3%	Driveways, patios, foundations, slabs
Hardwood lumber	+1.7%	+1.0%	−0.7%	Hardwood flooring, trim, cabinetry
Gypsum products	+0.2%	+1.0%	+2.1%	Drywall

Source: BLS Producer Price Index (not seasonally adjusted). BLS treats the latest four months (May–August 2026) as preliminary, so they may be revised. Series IDs are listed in the methodology section below.

Two patterns stand out:

The metals jump happened early and is now cooling off for copper and aluminum. Copper and aluminum mill shapes are 23% above a year ago but have slipped 2.2% over the last three months. Steel is still climbing, up 8.9% since May.
Roofing is the newest mover. Asphalt roofing materials were up modestly for most of the year, then rose 6.4% between May and August.

Why: Tariffs Are Doing Most of the Work

The categories with the biggest increases line up with the materials covered by expanded Section 232 tariffs. According to a Covington & Burling summary published April 23, 2026:

Steel, aluminum, and copper articles face a 50% tariff, with 25–50% on certain derivative products (most recently modified effective April 6, 2026).
Softwood timber and lumber face a 10% tariff, effective October 14, 2025.
Kitchen cabinets and vanities face a 50% tariff, effective January 1, 2026.

Domestic producers compete with imports, so tariffs tend to lift domestic prices too, not just the price of imported goods. That's consistent with what the price indexes show: the tariffed categories are up double digits, while largely domestic, untariffed materials like concrete and drywall have barely moved.

Labor: Wages Up 4.2%, Hiring Steady

Materials are only part of the bill. In BuildCost's cost data, labor makes up between 23% of a typical project (garage door installation) and 59% (roof replacement), with most projects landing between 40% and 55%.

According to BLS employment data for September 2026:

Average hourly earnings in construction: $41.69, up 4.2% from a year earlier.
Construction employment: 8.36 million, up 1.3% from a year earlier.

Pay is rising faster than headcount, and wage increases flow into contractor bids. That matters most for labor-heavy work like roofing, decks, and landscaping.

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What It Means for Your Project

How exposed your project is depends on its material mix. Here's how the data maps to common projects:

Most exposed:

Roof replacement. Asphalt roofing materials are up 6.4% in three months, and roofing is the most labor-heavy project in our data. Metal roofing is exposed to the steel tariff as well.
Decks, sheds, garages, and home additions. These are framing-heavy, so they track softwood lumber (+11.8%). Additions and garages also pull in steel, copper wiring, and roofing, which puts them in the path of nearly every increase in the table above.
Kitchen remodels. Imported cabinets and vanities carry a 50% tariff. If you're specifying imported cabinetry, ask for current pricing rather than relying on an older quote.

Less exposed:

Driveways and patios. Ready-mix concrete is up just 2.3%.
Basement finishing. Drywall is flat year over year. Your exposure here is mostly labor, plus copper wiring for any new circuits.

Where Building Costs Most

Material prices move nationally, but what you actually pay depends heavily on where you live. BuildCost's 2026 Construction Cost Index ranks all 50 states against the national average (1.00):

Highest cost	Index	Lowest cost	Index
Hawaii	1.55	Mississippi	0.85
Alaska	1.45	Arkansas	0.87
New York	1.40	West Virginia	0.88
California	1.35	Alabama	0.88
Massachusetts	1.32	South Carolina	0.90
New Jersey	1.30	Louisiana	0.90

The same project can cost nearly twice as much in Hawaii as in Mississippi. See the full 50-state index for your state.

What to Do If You're Planning a Project

Get a current estimate before collecting bids. A budget built on last year's numbers will understate tariffed materials. Start with a free estimate so you know what a fair bid looks like.
Collect your bids close together. Quotes gathered months apart are priced against different markets, which makes them hard to compare.
Ask how long each quote is valid, and whether it has a material escalation clause. In a rising market, that language decides who absorbs a price increase between signing and delivery.
Check quotes against local pricing. BuildCost's Quote Checker compares a contractor's price with typical costs for your state.

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Methodology and Sources

Material prices come from the U.S. Bureau of Labor Statistics Producer Price Index, not seasonally adjusted. Changes compare August 2026 with August 2025 (1 year), December 2025 (since Dec 2025), and May 2026 (last 3 months). BLS treats the most recent four months (May–August 2026) as preliminary, so these figures may be revised.

Series	BLS series ID
Inputs to residential construction, goods	WPUIP2311001
Steel mill products	WPU1017
Nonferrous mill shapes (copper & aluminum)	WPU1025
Softwood lumber	WPU0811
Asphalt felts and coatings	WPU136
Ready-mix concrete	WPU1333
Hardwood lumber	WPU0812
Gypsum products	WPU137

Labor comes from the BLS Current Employment Statistics survey, seasonally adjusted: average hourly earnings in construction (CES2000000003) and construction employment (CES2000000001), September 2026 vs. September 2025.

Tariff rates are from Covington & Burling (April 23, 2026). Tariff policy changes often, so check current rates before relying on them.

State index and labor shares are from BuildCost's own cost dataset, which also powers the Construction Cost Index.

How to cite this report: BuildCost, "Home Building Costs, Q4 2026," October 14, 2026, https://buildcost.io/blog/home-building-costs-q4-2026. You're welcome to quote, chart, or republish these figures with attribution. We plan to update this report quarterly as new BLS data is released.

Frequently Asked Questions

How much have building material prices gone up in 2026? Prices for all goods used in residential construction are up 8.0% since December 2025 and 7.8% from a year earlier, according to the BLS producer price index for August 2026. Increases are concentrated in steel (+23.4% year over year), copper and aluminum products (+23.3%), and softwood lumber (+11.8%).

Why is steel so much more expensive? Steel, aluminum, and copper articles face a 50% Section 232 tariff, most recently modified effective April 6, 2026. Steel mill product prices are up 23.4% from a year earlier and are still rising: up 8.9% between May and August 2026.

Are lumber prices going up? Yes. Softwood lumber, the type used for framing and decks, is up 11.8% from a year earlier and 17.9% since December 2025. Imported softwood lumber has faced a 10% tariff since October 14, 2025. Hardwood lumber is roughly flat (+1.7%).

Which home projects are least affected by rising material costs? Projects that rely mainly on concrete and drywall. Ready-mix concrete is up 2.3% from a year earlier and gypsum (drywall) is up 0.2%, so driveways, patios, and basement finishing are less exposed than roofs, decks, additions, or kitchen remodels.

How much are construction wages rising? Average hourly earnings in construction were $41.69 in September 2026, up 4.2% from a year earlier, according to BLS. Labor typically makes up 40–55% of a residential project's cost in BuildCost's data.

Should I wait for prices to come down before starting a project? The data doesn't point to near-term relief for the tariffed categories. Steel is still rising, and the overall index is at its highest level since at least early 2024. Copper and aluminum have eased slightly over the last three months. If your project is ready to go, a current estimate and well-timed bids are a better hedge than waiting.