A customized Baybrook model home by Tradewinds General Contracting in the Avimor Community in Boise, Idaho. Drone footage: Jeremy Erickson/Bloomberg

Building a Home in the U.S. Has Never Been More Expensive

From lumber to paint to concrete, the cost of almost every single item that goes into building a house in the U.S. is soaring. In some cases, the price increases have topped 100% since the pandemic began.

There are any number of factors at play—from rock-bottom mortgage rates to city dwellers’ rush to the suburbs to shortages of materials—but the simplest explanation is that there is just too much demand for builders and their suppliers to handle. All of this makes housing an extreme manifestation of the inflationary pressures percolating through the booming U.S. economy.

Homebuilding Commodity Prices Skyrocket

Prices of three key building materials

In Boise, Idaho, one of the hottest housing markets in the country, Steve Martinez opened up the financial books of his construction company, Tradewinds General Contracting Inc., to Bloomberg News to reveal the magnitude of the cost surge. He’s had to raise prices on some of the houses the company makes—which include the Baybrook, a single-floor, 3,031-square-foot model—to offset the higher costs, leading to many “tough conversations” with clients.

With raw materials prices continuing to surge around the world, the pressure on builders to increase costs is likely to grow stronger.

“This could be industry killing if things continue going the way they’re going,” said Martinez, who has had to tack on price increases during construction of anywhere from $40,000 to $100,000, primarily due to rising lumber costs. “We’re putting projects off. We’ve got clients that are hitting their price ceiling.”