Homebuilding cost growth falls to 15-year low

Residential construction costs rose just 0.4% in the March quarter, which was the lowest quarterly increase since 2010, according to the Cordell Construction Cost Index. As a result, annual cost growth fell from 4.0% in the December quarter to 3.4% in the March quarter.

However, building costs have risen 31.3% since the start of the pandemic in March 2020, so this slowdown in price growth is coming off a high base.

Builders are struggling to cope with higher supply costs and a shortage of skilled tradespeople. That said, there is plenty of homebuilding activity taking place around the country. Multinational construction group RLB reported there were 487 residential construction cranes operating during the first quarter of 2025. While this was 9.8% lower than the 540 residential cranes from the year before, it was still high by historical standards.

Please contact me if you’re thinking about building a home. I can help you secure a pre-approval for a construction loan, which will give you clarity around your budget. I can also explain how construction loans work, so you can begin the process with confidence.