If the cost of lumber, metal and fuel are any indication, the affordability of homes isn’t going to get better any time soon, according to one analysis of building materials. 

The producer price index for inputs to new nonresidential construction rose 7.1% from July 2025 to July 2026, according to the Associated General Contractors of America’s recent analysis of federal price data. While the increases vary across products, some have seen prices approach a 50% increase in the past year, such as diesel fuel and liquid asphalt. And ongoing tariffs on foreign goods are to blame, AGC says. 

“Construction firms are being hit with outsized cost increases for a host of materials and also labor,” said Ken Simonson, the association’s chief economist. “Unless there is relief from tariffs or additional funding for highway and transit projects, both private and public construction work face cutbacks.” 

While petroleum products saw the biggest jumps in cost, nearly every building material has become more expensive. Prices for aluminum mill shapes are up more than 40%, steel mill products more than 22%, and copper and brass mill shapes more than 18%. 

Lumber and plywood jumped 9.9%, the most since March 2022. Paving mixtures and blocks rose 6.6%, a three-year high. And construction plastics climbed 5%, the most since January 2023. 

The cost increases are contributing to concern that developers will scale back projects to cut costs, reducing demand for construction labor in the process.