If you’ve been thinking about building a home, there’s some encouraging news on the cost front.
According to the Cordell Construction Cost Index, residential construction costs rose by just 0.4% in the March quarter of 2025. That’s the smallest quarterly increase since 2010, and a sign that the cost pressures in the building industry may finally be easing.
Slower Growth, But Costs Still High
This quarterly slowdown brings annual cost growth down to 3.4%, compared to 4.0% in the December quarter. While that’s good news, it’s important to note that building costs have still climbed significantly in recent years—up 31.3% since March 2020, at the start of the pandemic. So while the rate of increase is easing, prices remain high relative to pre-pandemic levels.
What’s Driving the Change?
Despite the slowdown, the construction industry is still grappling with some major challenges:
High supply costs
A shortage of skilled tradespeople
These issues are making it harder for builders to keep up with demand, even as new projects continue to break ground.
Homebuilding Activity Remains Strong
One key indicator of activity is crane usage. According to Rider Levett Bucknall (RLB), a multinational construction consultancy, there were 487 residential construction cranes operating across the country in the first quarter of 2025. That’s down 9.8% from the 540 cranes in the same quarter last year, but still high by historical standards.
So, while the industry is under pressure, homebuilding is far from slowing to a halt.
Thinking About Building? Here’s How I Can Help
If you’re considering building a home, now might be a great time to start planning—especially with construction cost growth slowing.
I can help you:
✅ Secure a pre-approval for a construction loan
✅ Understand how construction loans work
✅ Gain clarity around your budget, so you can approach the process with confidence
