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Building Material Price Inflation Nears Four Year High – Eye On Housing

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The Producer Price Index for final demand was up 1.3% in September, after rising 0.5% in August. Compared to a year ago, final demand prices were up 6.3%. The price of goods used in new residential construction (including energy) was up 1.8% over the month and up 9.7% from last year, while the price of services was up 2.2% over the month and up 11.3% from last year. Combining goods and services, the price index for inputs to new residential construction was up 2.0% in September and 10.3% higher than last year.

Input Goods

The goods component has a larger importance to the inputs to residential construction price index, representing around 60% of the total. On a monthly basis, the price of input goods to new residential construction was up 1.8% in September after rising 0.9% in August.

The input goods to residential construction index can be further broken down into two separate components, one measuring energy inputs with the other measuring remaining goods. The latter of these two components simply represents building materials used in residential construction, which makes up around 93% of the goods index.

Energy input prices rose 13.0% in September and were 64.1% higher than a year ago. Building material prices were up 0.4% in September and up 5.5% compared to one year ago, the highest level since 8.0% in December 2022.

Price increases for energy products outpaced other materials. No. 2 diesel fuel prices were up 24.2% over the month and 115.2% higher than a year ago. Unleaded regular gasoline prices rose 13.0% over the month and were 66.1% higher than a year ago. Outside of energy products, particleboard and fiberboard prices rose 3.5% over the month and were up 7.8%, meanwhile prices for mineral wool (f[RD2.1]or insulation) rose 2.8% over the month and were up 1.6% from a year ago. Softwood veneer and plywood prices were up 2.7% over the month and 15.9% higher than a year ago.

Input Services

Prices for service inputs to residential construction rose 2.2% in September. On a year-over-year basis, service input prices were up 11.3%, the highest since April 2022 when service prices rose 17.7% year-over-year. The price index for service inputs to residential construction can be broken out into three separate components: a trade services component, a transportation and warehousing services component, and a services excluding trade, transportation, and warehousing component (other services).

The most significant component is trade services (around 60%), followed by other services (around 29%), and finally transportation and warehousing services (around 11%). The largest component, trade services, was up 14.0% from a year ago. The price of transportation and warehousing services has risen 19.3% over the year, while prices for other services were up 3.1% over the year.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Best Year for Missing Middle Construction Since 2007 – Eye On Housing

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While not a huge jump, 2025 featured the highest construction volume for multifamily missing middle housing starts.

The missing middle construction sector includes development of medium-density housing, such as townhouses, duplexes and other small multifamily properties. The multifamily segment of the missing middle (apartments in 2- to 4-unit properties) has generally disappointed since the Great Recession.

For the fourth quarter of 2025, there were 5,000 2- to 4-unit housing unit construction starts. This was flat compared to the fourth quarter of 2024.

Over the course of 2025, there were 19,000 such starts, up 6% compared to 2024 (18,000). Nonetheless, this subsector of residential construction continues to underperform relative to its potential, due in part to zoning restrictions.

As a share of all multifamily production, 2- to 4-unit development was just 5% of total multifamily development for the fourth quarter. This remains lower than recent historical trends. From 2000 to 2010, such home construction made up a little less than 11% of total multifamily construction.

Construction of the missing middle has clearly lagged during the post-Great Recession period and will continue to do so without zoning reform focused on light-touch density.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Price Growth for Building Materials Slows to Start the Year – Eye On Housing

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Residential building material prices rose at a slower rate in January, according to the latest Producer Price Index release from the Bureau of Labor Statistics. This was the first decline in the rate of price growth since April of last year. Metal products continue to experience price increases, while specific wood products are showing declines in prices.

The Producer Price Index for final demand increased 0.5% in January, after rising 0.4% in December. The January increase in final demand is linked directly to final demand services, which saw prices rise 0.8% in January. The index for final demand goods decreased 0.3% in January.

The price index for inputs to new residential construction rose 0.7% in January and was up 3.3% from last year. The price of goods used in new residential construction was up 0.9% over the month and 2.4% from last year. Meanwhile, the price for services was up 0.3% over the month and up 4.7% from last year.

Input Goods

The goods component has a larger importance to the inputs to residential construction price index, representing around 60%. On a monthly basis, the price of input goods to new residential construction was up 0.9% in January.

The input goods to residential construction index can be further broken down into two separate components, one measuring energy inputs with the other measuring remaining goods. The latter of these two components simply represents building materials used in residential construction, which makes up around 93% of the goods index.

Energy input prices fell 0.9% in January and were 10.3% lower than one year ago. Building material prices were up 1.0% in January and up 3.3% compared to one year ago, marking the lowest year-over-year price change since July of last year.

The largest year-over-year price increases continue to show in metal products. Topping the list in January was metal molding and trim, with prices up 48.3% from last year. One product that has seen rapid price growth acceleration over the past few months has been nonferrous metal and cable with prices up 19.7%. Price declines for materials over the year are concentrated among wood products with prices for particleboard and fiberboard down 24.4%, treated wood products down 5.0%, and softwood lumber down 3.3%.

Input Services

Prices for service inputs to residential construction reported an increase of 0.3% in January. On a year-over-year basis, service input prices were up 4.7%. The price index for service inputs to residential construction can be broken out into three separate components: a trade services component, a transportation and warehousing services component, and a services excluding trade, transportation, and warehousing component (other services).

The most significant component is trade services (around 60%), followed by other services (around 29%), and finally transportation and warehousing services (around 11%). The largest component, trade services, was up 7.1% from a year ago. The transportation and warehousing services rose 2.0%, while prices for other services were up 1.1% over the year.

Expanded Inputs to New Construction

Within the PPI that BLS publishes, new experimental data was recently published regarding inputs to new construction. The data expands existing inputs to industry indexes by incorporating import prices with prices for domestically produced goods and services. With this additional data, users can track how industry input costs are changing among domestically produced products and imported products. This data focuses on new construction, but the complete dataset includes indices across numerous industries that can be found here on BLS website. 

New construction input prices are primarily influenced by domestically produced goods and services, with domestic products accounting for 90% of the weight of the industry index for new construction. Imported goods make up the remaining 10% of the index.  

The latest available data, for November 2025, showed that domestically produced goods continue to have faster price growth compared to imported goods used in new construction. On a year-over-year basis, the index for domestic goods increased 3.0%, while prices for imported goods have fallen 3.0%.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Lower Rates Lift Mortgage Activity at Start of the Year – Eye On Housing

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Mortgage application activity rose sharply in January, driven primarily by a surge in refinancing activity as mortgage rates declined to a new low. The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, increased 12.9% from December on a seasonally adjusted basis and was 61.3% higher than a year earlier.

The average contract interest rate for 30-year fixed mortgages dropped 13 basis points (bps) to 6.2% following the announcement of $200 billion in mortgage-backed securities (MBS) buybacks by the GSEs. Compared with January 2025, the 30-year fixed mortgage rate was 81 bps lower. The decline in rates supported month-over-month gains in both purchase and refinance activity. Purchase applications increased 2.9%, while refinance applications surged 19.8%. Relative to January 2025, purchase activity increased 16.2%, while refinance applications jumped 143.8%.

By loan type, applications for fixed-rate mortgages (FRMs) and adjustable-rate mortgages (ARMs) increased 12.9% and 7.9% month-over-month, respectively. On a year-over-year basis, FRM applications were up 57.8%, while ARM applications more than doubled, rising 113.1%. As of January 2026, ARMs accounted for an average of 7.1% of total applications on a non-seasonally adjusted basis, down 0.4 percentage points from December but 1.7 percentage points higher than a year earlier.

For loan sizes, the average loan amount across the total market increased by 1.1% to $402,000. Average purchase loan sizes increased 2.5% to $435,400, while the refinance loan size increased modestly by 0.2% to $378,000. In contrast, the average ARM loan size continued to decline, falling 4.4% to $925,600.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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Mortgage Rates End 2025 at the Lowest Level of the Year – Eye On Housing

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Long-term mortgage rates have been declining since mid- 2025 and ended the year at their lowest level since September 2024. According to Freddie Mac, the 30-year fixed-rate mortgage averaged 6.19% in December, 5 basis points (bps) lower than November. Meanwhile, the 15-year rate declined 3 bps to 5.48%. Compared to a year ago, the 30-year rate is lower by about half a percentage point, or 53 basis points (bps). The 15-year rate is also lower by 45 bps.

The 10-year Treasury yield, a key benchmark for long-term borrowing, averaged 4.12% in December – a modest increase of 2 bps from the previous month. Given forward-looking markets, the 10-year Treasury yield declined during the week preceding the Federal Reserve’s third rate cut of the year. However, compared to the prior month, yields ended slightly higher, rising 2 bps, as labor market data released shortly thereafter pointed to slowing job gains and rising unemployment rate.

Falling lower mortgage rates have started to translate into gains as existing home sales edged up slightly in November. However, this increase remains limited as mortgage rates above 6% are still considered elevated. Nonetheless, as financing costs continue decline, more households are likely to reenter the housing market. An NAHB analysis shows that a 25 bps reduction in the 30-year mortgage rate, from 6.25% to 6.00%, could bring approximately 1.1 million additional households back into the buyer pool.

NAHB expects the 30-year mortgage rate to average 6.17% in 2026 and would reach 6% by 2027.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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In Home Improvement

How to Set Business Goals for a Successful Year

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Ascent Contracting IncSave Photo
2. Analyze Key Areas of Your Business

Take a deep dive into the previous year’s performance of your firm, prioritizing four main areas.

Finances. Profitability and cash flow are, of course, essential for any business, so make sure you cover this aspect thoroughly during your annual review. “I keep records of each project, the time spent and revenue earned, as well as the types of projects that work best for me,” Auzins says. “We review fees and costs, and work out if changes are needed.”

“We analyze profitability, evaluate individual project performance and examine trends in financial data,” says Alex Strikovs, managing director of design-build firm Home Republic. “This helps us understand what drives profitability and where to focus our efforts.”

Reader recommends doing an audit of all your outgoings. “It’s important to keep an eye on the functionality of key expensive tools, such as the computer and software, and to plan upgrades ahead of time,” he says. “I also review the ongoing relevance of regular outgoings, such as memberships and publicity payments, to ensure they’re still required and are delivering.

“Income is obviously also key and with [at least] nine months of income data in hand, as well as client numbers and types of projects, I can reflect on the balance and areas of income generation of the business,” he says. “From these, I can make informed decisions on my preferred work and my pricing model for the coming year.”

How to Build Systems and Teams That Can Cope With Busy Times



This article was originally published by a www.houzz.com . Read the Original article here. .

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In Home Improvement

8 Ideas for Welcoming the New Year

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1. An Elegant Soiree

Whether you want to celebrate with just that special person in your life or fill your house with friends, New Year’s Eve is the perfect excuse to pull out all of the stops. Champagne and oysters? Why not?

Indulging in these luxuries at home is far more cost conscious than ordering them in a restaurant. A note on the invitation to dress “to the nines” should be enough encouragement to get people in their party clothes.

For extra amusement scatter an assortment of fun props across a console table — boas, tiaras, hats, noisemakers, horns — and invite guests to help themselves. As always, be a thoughtful host and provide festive nonalcoholic beverages for your guests who do not drink.

Find an interior designer on Houzz



This article was originally published by a www.houzz.com . Read the Original article here. .

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Builder Sentiment Inches Higher but Ends the Year in Negative Territory – Eye On Housing

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Builder confidence inched higher to end the year but still remains well into negative territory as builders continue to grapple with rising construction costs, tariff and economic uncertainty, and many potential buyers remaining on the sidelines due to affordability concerns.

Builder confidence in the market for newly built single-family homes rose one point to 39 in December, according to the National Association of Home Builders (NAHB)/Wells Fargo Housing Market Index (HMI). Sentiment levels were below the breakeven point of 50 every month in 2025 and ranged in the high 30s in the final quarter of the year.

Market conditions remain challenging with two-thirds of builders reporting they are offering incentives to move buyers off the fence.

In positive signs for the market, builders report that future sales expectations have been above the key breakeven level of 50 for the past three months and the recent easing of monetary policy should help builder loan conditions at the start of 2026. However, builders continue to face supply-side headwinds, as regulatory costs and material prices remain stubbornly high. Rising inventory also has increased competition for newly built homes.

In a further sign of ongoing challenges for the housing market, the latest HMI survey also revealed that 40% of builders reported cutting prices in December, marking the second consecutive month the share has been at 40% or higher since May 2020. It was 41% in November. Meanwhile, the average price reduction was 5% in December, down from the 6% rate in November. The use of sales incentives was 67% in December, the highest percentage in the post-Covid period.

Derived from a monthly survey that NAHB has been conducting for more than 40 years, the NAHB/Wells Fargo HMI gauges builder perceptions of current single-family home sales and sales expectations for the next six months as “good,” “fair” or “poor.” The survey also asks builders to rate traffic of prospective buyers as “high to very high,” “average” or “low to very low.” Scores for each component are then used to calculate a seasonally adjusted index where any number over 50 indicates that more builders view conditions as good than poor.

The HMI index gauging current sales conditions increased one point to 42, the index measuring future sales rose one point to 52 and the gauge charting traffic of prospective buyers held steady at 26.

Looking at the three-month moving averages for regional HMI scores, the Northeast fell one point to 47, the Midwest rose two points to 43, the South increased two points to 36 and the West gained four points to 34.

The HMI tables can be found at nahb.org/hmi.

Editor’s Note: With the official 2026 release schedule for the Survey of Construction still unavailable from the U.S. Census Bureau, NAHB confirms the HMI for January 2026 will be released on January 16.  A schedule for the rest of the year will be available as soon as possible.



This article was originally published by a eyeonhousing.org . Read the Original article here. .

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In Home Improvement

10 Ways to Use Cloud Dancer, Pantone’s 2026 Color of the Year

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Cloud Dancer is a soft off-white with just a hint of yellow-green — clean, crisp and never stark. Not warm and creamy, not icy and gray, it’s a versatile white that works anywhere.

But before we dive into ways to use it at home, a quick note on Pantone. The company develops and manages color standards and tools for a variety of industries, including fashion, advertising, branding, product development and interior design. Every year the company puts out color trend forecasts, including a Color of the Year selection, to help guide product design and marketing. The institute partners with major brands to showcase its annual color selection. This coming year you’ll find Cloud Dancer used for Joybird furniture fabrics, Motorola’s Edge 70 smartphone and 3M Post-it Notes, among other products.



This article was originally published by a www.houzz.com . Read the Original article here. .

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The Leading Economic Forecast Event of the Year  – Eye On Housing

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Every year, NAHB and other industry experts and economists bring their latest insights to the NAHB International Builders’ Show® (IBS). For 2026, IBS offers an unparalleled lineup of IBS Education sessions that cover every sector of the housing industry: single-family, multifamily, remodeling, design trends, and building materials.  

The Builders’ Show in 2026 is in Orlando, February 17 – 19. This is the only event where you’ll find all these speakers and sessions at one conference: 

The Outlook: 2026 Housing & Economic Forecast (Super Session)  

Tuesday, February 17 | 2:15 – 3:45 PM  

This IBS Super Session is hosted by our very own Chief Economist, Robert Dietz, as well as Chief Economist of Realtor.com, Danielle Hale, and Chief Economist of Zonda, Ali Wolf. Not only does this session give you the chance to hear from these three nationally recognized economists, but it also gives you a complete overview of the housing economy.  

2026 Multifamily Market Outlook 

Tuesday, February 17 | 10:00 – 11:00 AM  

Danushka Nanayakkara-Skillington, NAHB AVP of Forecasting & Analysis, and Selma Hempp, Chief Economist of Cotality, host a deep dive into multifamily housing. Explore the construction pipeline, financing challenges, rent growth, and more. Join the discussion for an exclusive forecast of where the multifamily sector is headed.  

Remodeling by the Numbers: Market Outlook & Business Benchmarks for 2026 

Wednesday, February 18 | 8:15 – 9:15 AM 

Featuring NAHB Economist Eric Lynch, as well as remodeling expert Alan Hanbury, learn what key indicators and trends are shaping the home improvement industry and where it is headed. Compare how your business is doing with exclusive benchmarks on profit margins, operating costs, and more with exclusive findings from the NAHB ‘Remodelers’ Cost of Doing Business’ study.  

Home Trends, Buyer Preferences & Most Likely Features for 2026 

Wednesday, February 18 | 10:00 – 11:00 AM 

Explore the latest research on the home and community features buyers want most in this session led by NAHB AVP of Survey Research, Rose Quint and architect and industry thought-leader Donald Ruthroff. Discover what trends are shaping new home designs, including how preferences shift by price– point. See these trends in action, illustrated through award-winning designs from recent Best in American Living Awards™ (BALA) winners. 

Building Materials in Flux: Pricing Trends, Trade Dynamics & Supply Chain 

Wednesday, February 18 | 2:15 – 3:15 PM 

Gain timely insights into the ever-evolving trending issue of building materials, hosted by NAHB Director of Tax and Trade, Jesse Wade, custom builder and industry leader Don Dabbert, and industry expert and analyst Nishu Sood from John Burns Research and Consulting. Learn how key building materials like lumber are affected by tariffs and other international trade dynamics. Explore what’s driving material costs and availability, and how global and domestic supply chains are adapting.   

Register Now  

To attend IBS Education sessions, you must register for an Expo+Education Pass.  Seating for sessions is on a first-come, first-served basis. So, register for an IBS Expo+Education Pass and then mark these sessions on your calendar. For more information on all that IBS has to offer, please visit BuildersShow.com. We hope to see you there!  

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This article was originally published by a eyeonhousing.org . Read the Original article here. .

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