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Prices for inputs to new residential construction—excluding capital investment, labor, and imports—were up 0.5% in February according to the most recent Producer Price Index (PPI) report published by the U.S. Bureau of Labor Statistics. The increase in January was revised downward to 1.1%. The Producer Price Index measures prices that domestic producers receive for their goods and services, this differs from the Consumer Price Index which measures what consumers pay and includes both domestic products as well as imports.

The inputs to the New Residential Construction Price Index grew 0.7% from February of last year. The index can be broken into two components—the goods component increased 1.2% over the year, while services decreased 0.1%. For comparison, the total final demand index, which measures all goods and services across the economy, increased 3.2% over the year, with final demand with respect to goods up 1.7% and final demand for services up 3.9% over the year.

Input Goods

The goods component has a larger importance to the total residential construction inputs price index, representing around 60%. For the month, the price of input goods to new residential construction was up 0.6% in February.

The input goods to residential construction index can be further broken down into two separate components, one measuring energy inputs with the other measuring goods less energy inputs. 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 grew 2.6% between January and February but remained 8.5% lower compared to one year ago. Building material prices were up 0.5% between January and February while they were up 2.0% compared to one year ago.

Among materials used in residential construction, lumber and wood products ranks 3rd in terms of importance for the Inputs to New Residential Construction Index. Nonmetallic mineral products and metal products rank 1st and 2nd, respectively. The top lumber and wood products include general millwork, prefabricated structural members, not-edge worked softwood lumber, softwood veneer/plywood and hardwood veneer/plywood. Prices for these wood commodities experienced little growth for most of 2024. Currently, softwood lumber prices were 11.7% higher compared to one year ago while on a monthly basis, prices rose 3.0%. This marks the fourth straight month where yearly price growth was above 10% for softwood lumber.

Input Services

While prices of inputs to residential construction for services were down 0.1% over the year, they were up 0.4% in February from January. 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. The most significant component is trade services (around 60%), followed by services less trade, transportation and warehousing (around 29%), and finally transportation and warehousing services (around 11%). The largest component, trade services, was down 1.5% from a year ago. The services less trade, transportation and warehousing component was up 1.6% over the year.  Lastly, prices for transportation and warehousing services advanced 2.2% compared to February last year.

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Following two straight quarters of deceleration, house price appreciation accelerated slightly in the fourth quarter of 2024 due to the persistent high mortgage rates and low inventory. Although inventories of existing homes have improved from a year ago, the current 3.5-month supply remains below the 4.5- to 6-month supply that considered a balanced housing market.

Nationally, according to the quarterly all-transactions House Price Index (HPI) released by the Federal Housing Finance Agency (FHFA), U.S. house prices rose 5.4% in the fourth quarter of 2024, compared to the fourth quarter of 2023. The year-over-year rate has decreased from a high of 20.6% in the second quarter of 2022, but is higher than the previous quarter’s rate of 5.2%.

The quarterly FHFA HPI not only reports house prices at the national level but also provides insights about house price fluctuations at the state and metro area levels. The FHFA HPI used in this article is the all-transactions index, measuring average price changes in repeat sales or refinancings on the same single-family properties.  

Between the fourth quarter of 2023 and the fourth quarter of 2024, 49 states and the District of Columbia had positive house price appreciation. Vermont topped the house price appreciation list with an 8.9% gain, followed by New Jersey and Connecticut both with 8.3% gains. At the other end, Louisiana had the lowest house price appreciation (+2.1%), while Hawaii was the only state to experience a price decline (-4.3%). Among all 50 states and the District of Columbia, 31 states reached or exceeded the national growth rate of 5.4%. Compared to the third quarter of 2024, 32 out of the 50 states had an acceleration in house price appreciation in the fourth quarter.

House price growth widely varied across U.S. metro areas year-over-year, ranging from -4.9% to +24.7%. In the fourth quarter of 2024, 18 metro areas, in reddish color on the map above, had negative house price appreciation, while the remaining 366 metro areas experienced positive price appreciation. Punta Gorda, FL had the largest decline in house prices, while Cumberland, MD-WV saw the highest increase over the previous four quarters.

Additionally, house prices have increased dramatically since the COVID-19 pandemic. Nationally, house prices rose 53% between the first quarter of 2020 and the fourth quarter of 2024. More than half of metro areas saw house prices rise by more than the national price growth rate of 53%.

The table below shows the top and bottom ten markets for house price appreciation between the first quarter of 2020 and the fourth quarter of 2024. Among all the metro areas, house price appreciation ranged from 11.2% to 87.8%. Ocean City, NJ experienced the highest house price appreciation. Lake Charles, LA had the lowest appreciation for the third quarter in a row.

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The traditional price gap between new and existing homes was nearly nonexistent at the end of 2024. The median price for a new single-family home sold in the fourth quarter of 2024 was $419,200, a mere $9,100 above the existing home sales price of $410,100, according to U.S. Census Bureau and National Association of Realtors data (not seasonally adjusted – NSA).

Typically, new homes carry a price premium over existing homes. However, for the first time in the quarterly data since 1989, the median existing home price exceeded the new home price in the second quarter of 2024, and again in the third quarter of 2024. The average price premium of new home sales over existing home sales for 2024 was $8,725. To put this into perspective, 2023’s premium average was $33,750 and the 10-year average is $50,657.

Both new and existing homes saw dramatic price increases post-pandemic due to higher construction costs and limited supply. Although overall home prices remain elevated compared to historical norms, new home prices have moderated due to builder business decisions, while existing home prices continue to increase due to lean supply.

The median price for a single-family new home sold in the fourth quarter of 2024 decreased by 0.95% from the previous year. New home prices have continued to decline year-over-year for the previous seven quarters.

Meanwhile, the median price for existing single-family homes increased 4.80% from one year ago. Existing home prices have continued to experience year-over-year increases for six consecutive quarters.

There are several factors as to why new and existing homes are selling at similar price points. Tight inventory continues to push up prices for existing homes, as many homeowners who secured low mortgage rates during the pandemic are hesitant to sell due to current high interest rates.

Meanwhile, new home pricing is more volatile – prices change due to the types and locations of homes being built. Despite various challenges facing the industry, home builders are adapting to affordability challenges by selling smaller lots, constructing smaller homes, and offering incentives.

Additionally, there has been a shift in home building toward the South, associated with less expensive homes because of policy effects. In the fourth quarter of 2024, the percentage of new homes sold in the South was 63%, compared to 44% of existing homes (NSA).

The least expensive region for homes in the fourth quarter was the Midwest, with a median price of $368,000 for new homes and $304,800 for existing homes. The South followed closely, with a median new home price of $377,200 and an existing home price of $366,800. New homes were most expensive in the Northeast with a median price of $798,000, while the West sold at $560,000. However, for existing homes, the West led as the most expensive region at $633,500 homes, followed by the Northeast at $487,900.

The new home price premium was most pronounced in the Northeast, where new homes sold for $310,900 more than existing homes. In contrast, the South saw little difference with a modest $10,400—similar to the national trend. Uniquely, this pattern reversed in the West, where existing homes were $72,600 more than new homes.

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On a year-over-year basis, home prices grew at a rate of 3.75% for November, according to the S&P CoreLogic Case-Shiller Home Price Index (NSA). This marks an increase from the 3.59% growth rate recorded in October but is down from a peak of 6.54% in March 2024.

By Metro Area

In addition to tracking national home price changes, the S&P CoreLogic Index (SA) also reports home price indexes across 20 metro areas. Compared to last year, 19 of 20 metro areas reported a home price increase. There were 10 metro areas that grew more than the national rate of 3.75%. The highest annual rate was New York at 7.37%, followed by Chicago at 6.22% and Washington DC at 5.90%. Denver grew at the smallest rate at 0.92%, followed closely by Dallas at 1.02%. Tampa was the only area that experienced a decline from last year at a rate of -0.33%.

By Census Division

A similar index, the Federal Housing Finance Agency Home Price Index (SA) publishes not only national data but also data by census division. The national year-over-year rate was 4.22% for November. Meanwhile, the division with the highest year-over-year rate was 7.67% in New England, while the lowest was 1.81% in West South Central. A three-month trend in rates is shown for each division below. The FHFA Home Price Index releases their metro and state data on a quarterly basis, which NAHB analyzed in a previous post.

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Prices for inputs to new residential construction—excluding capital investment, labor, and imports—were unchanged in December according to the most recent Producer Price Index (PPI) report published by the U.S. Bureau of Labor Statistics. This index grew 0.8% over 2024, the lowest yearly increase in the index since its inception in 2014.

The inputs to the new residential construction price index can be broken into two components—one for goods and another for services. The goods component increased 1.7% over the year, while services decreased 0.4%. For comparison, the total final demand index increased 3.3% in 2024, with final demand with respect to goods up 1.8% and final demand for services up 4.0% over the year.

Input Goods

The goods component has a larger importance to the total residential construction inputs price index, representing around 60%. The price of input goods to new residential construction was down 0.1% in December from November. The input goods to residential construction index can be further broken down into two separate components, one measuring energy inputs with the other measuring goods less energy inputs. The latter of these two components simply represents building materials used in residential construction, which makes up around 93% of the goods index.

The price of goods used in residential construction grew 1.7% in 2024, slightly higher than the growth in 2023 of 1.0%. This growth can be attributed to the rise in the prices of building materials, which grew 2.2% in 2024. The price of energy inputs fell for the second straight year, down 5.3% in 2024.

At the individual commodity level, the five commodities with the highest importance for building materials to the new residential construction index were as follows: ready-mix concrete, general millwork, paving mixtures/blocks, sheet metal products, and wood office furniture/store fixtures. Across these commodities, there was price growth for most commodities in 2024 except for sheet metal products. Ready-mix concrete was up 5.1%, wood office furniture/store fixtures up 4.3%, general millwork up 2.5%, paving mixtures/blocks up 2.3% while sheet metal products were down 0.2%. The commodity used in new residential construction the featured the highest price growth in 2024 was softwood lumber, not edge worked, which increased 14.7% in 2024. The commodity where prices declined the most was No. 2 diesel fuel, down 13.9%.

Input Services

Prices of inputs to residential construction for services were up 0.5% in December from November. 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. The most significant component is trade services (around 60%), followed by services less trade, transportation and warehousing (around 29%), and finally transportation and warehousing services (around 11%). The largest component, trade services, was down 1.8% in 2024 after growing 5.8% in 2023.  Across individual services, credit deposit services advanced the most in 2024, up 21.2% over the year while the prices for metal, mineral and ore wholesaling services fell the most, down 19.2%.

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Defend Your Claim to Quality

Make it clear that you place great emphasis on quality and that quality has its price. After all, you want to work with clients who appreciate good work and are willing to pay for it. This willingness on the part of your client may (or may not) become apparent early on.

Luisa Haase-Kiewning of Lu Interior Berlin, for example, started charging an extra fee several years ago. She charges for her time spent on the initial meeting as well as for travel time. This is justified as she arrives prepared and with good ideas after completing a certain amount of preparatory work prior to meeting with her clients.

And remember, if your client is not willing to pay for quality, it could be a warning sign that working together may not be smooth — or possible.

Lara Theel, managing director of Stand Out Design, recommends a similar approach. Explain to your clients, from the smallest to the largest items, how rising prices have affected the elements and materials in their project. Point out how companies that don’t pass along some of the current price increases are cutting back in other places.

Theel and her team focus on “longevity, quality and sustainability” and customers appreciate that.

Tip: Positive reviews on your Houzz profile and a visible Best of Houzz award help build trust and distinguish your excellent work from competitors.



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House prices posted modest annual growth for the third quarter of 2024, as elevated mortgage rates kept many potential home buyers away from the housing market. Nonetheless, housing inventory has improved in recent months.

Nationally, house price appreciation has decelerated for two straight quarters. According to the quarterly all-transactions House Price Index (HPI) released by the Federal Housing Finance Agency (FHFA), U.S. house prices rose 5.1% in the third quarter of 2024, compared to the third quarter of 2023.

The quarterly FHFA HPI not only reports house prices at the national level, but also provides insights about house price fluctuations at the state and metro area levels. The FHFA HPI used in this article is the all-transactions index, measuring average price changes in repeat sales or refinancings on the same single-family properties.  

Between the third quarter of 2023 and the third quarter of 2024, all 50 states and the District of Columbia had positive house price appreciation, ranging from 1.2% to 8.8%. New Jersey and Connecticut topped the house price appreciation list with an 8.8% gain. They were followed by Rhode Island with an 8.4% gain. Meanwhile, the District of Columbia had the lowest price growth (+1.2%). Among all 50 states and the District of Columbia, 29 states exceeded the national growth rate of 5.1%. Compared to the second quarter of 2024, 40 out of the 50 states had a deceleration in house price appreciation in the third quarter.

House prices have changed unevenly across U.S. metro areas, from the third quarter of 2023 to the third quarter of 2024. House price appreciation ranged from -9.0% to +19.1%. In the third quarter of 2024, 21 metro areas, in reddish color on the map above, had negative house price appreciation, while the remaining 363 metro areas experienced positive price appreciation.

Additionally, house prices have increased dramatically since the COVID-19 pandemic. Nationally, house prices rose 50.4% between the first quarter of 2020 and the third quarter of 2024. More than half of the metro areas saw house prices rise by more than the national price growth rate of 50.4%.

The table below shows the top and bottom ten markets for house price appreciation between the first quarter of 2020 and the third quarter of 2024. Among all the metro areas, house price appreciation ranged from 13.1% to 81.4%. Knoxville, TN has experienced the highest house price appreciation. Lake Charles, LA had the lowest appreciation.

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Home price growth continued to slow in August, growing at a rate just above 4% year-over-year. The S&P CoreLogic Case-Shiller Home Price Index (seasonally adjusted – SA) posted a 4.24% annual gain, down from a 4.82% increase in July. Similarly, the Federal Housing Finance Agency Home Price Index (SA) rose 4.25%, down from 4.72% in July. Both indexes experienced a sixth consecutive year-over-year deceleration in August. The year-over-year rate peaked in February 2024 when the S&P CoreLogic Case-Shiller stood at 6.57% and the FHFA at 7.28%.

By Metro Area

In addition to tracking national home price changes, the S&P CoreLogic Index (SA) also reports home price indexes across major metro areas. Compared to last year, all 20 metro areas reported a home price increase.  There were 12 metro areas that grew more than the national rate of 4.24%. The highest annual rate was New York at 8.07%, followed by Las Vegas and Chicago both with rates of 7.22%. The smallest home price growth over the year was seen by Denver at 0.68%, followed by Portland at 0.82%, and Dallas at 1.57%.

By Census Division

Monthly, the FHFA Home Price Index (SA) publishes not only national data but also data by census division. All divisions saw an annual increase of over 2% in August. The highest rate for August was 6.31% in the East South Central division, while the lowest was 2.36% in the West South Central division. As shown in graph below, all divisions saw a slow in rates compared to June. The FHFA Home Price Index releases their metro and state data on a quarterly basis, which NAHB analyzed in a previous post.

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Prices for inputs to new residential construction—excluding capital investment, labor, and imports—decreased 0.6% in September according to the most recent Producer Price Index (PPI) report published by the U.S. Bureau of Labor Statistics. Compared to a year ago, this index was down 0.1% in September after an increase of 1.0% in August.

The inputs to new residential construction price index can be broken into two components­—one for goods and another for services. The goods component decreased 0.7% over the year, while services increased 1.0%. For comparison, the total final demand index increased 1.8% over the year in September, with final demand goods down 1.1% and final demand services up 3.1% over the year.

Input Goods

The goods component has a larger importance to the total residential construction inputs price index, around 60%. The price of input goods to residential construction was down 0.7% in September from 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 goods less energy inputs. The latter of these two components simply represents building materials used in residential construction, which makes up around 93% of the goods index.

Prices for inputs to residential construction, goods less energy, were up 1.5% in September compared to a year ago. This year-over-year growth has continued to slow since April when it was at 2.5% and remains well below growth in September of 2022 when it was at 14.3%. The year-over-year growth in September 2023 was 1.0%, making this year’s growth slightly higher. The index for inputs to residential construction for energy fell 23.5% in September, the largest yearly decrease since 26.1% in July 2023.

The graph below focuses on the data since the start of 2023 for residential goods inputs. Energy prices have retreated over the past year, with only two periods of growth in 2024.

Input Services

Prices of inputs to residential construction, services, fell 0.5% in September from August. The price index for service inputs to residential construction can be broken out into three separate components: the trade services component, the transportation and warehousing services component, and the services less trade, transportation and warehousing component. The most vital component is trade services (around 60%), followed by services less trade, transportation and warehousing (around 29%), and finally transportation and warehousing services (around 11%). The largest component, trade services, compared to last year was up 0.4% in September after increasing 2.1% in August.

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Home prices remain elevated but price growth continues to decelerate, according to the S&P CoreLogic Case-Shiller Home Price Index (HPI) recent release. The S&P CoreLogic Case-Shiller HPI (seasonally adjusted) reached its 14th monthly consecutive record high in July 2024. The index increased at a seasonally adjusted annual rate of 2.15%, down slightly from a revised June rate of 2.19%. This rate has slowed over the past six months, from a high of 6.53% in February 2024. The index has not seen an outright decrease since January of 2023 (nineteen months).

Separately, the House Price Index released by the Federal Housing Finance Agency (FHFA; SA) posted its sixth monthly consecutive record high, after having decreased slightly in January of this year. The FHFA HPI recorded a 1.57% increase in July, upward from a revised 0.03% rate in June.  

Year-Over-Year  

Home prices experienced a fifth consecutive year-over-year declaration in July, tabulated by both indexes. The S&P CoreLogic Case-Shiller HPI (not seasonally adjusted – NSA) posted a 4.96% annual gain in July, down from a revised 5.50% increase in June. Meanwhile, the FHFA HPI (NSA) index rose 4.56%, down from a revised 5.37% in June. Both indexes have seen yearly growth rates slow since February 2024, when the S&P CoreLogic Case-Shiller stood at 6.54% and the FHFA at 7.23%. 

By Metro Area

In addition to tracking national home price changes, the S&P CoreLogic Index (SA) also reports home price indexes across 20 metro areas. At an annual rate, only one out of 20 metro areas reported a home price decline: San Francisco at -3.10%. Among the 20 metro areas, 15 exceeded the national rate of 2.15%. Seattle had the highest rate at 13.78%, followed by New York at 6.11%, and Las Vegas at 5.76%. The monthly trends are shown in the graph below.  

Monthly, the FHFA HPI (SA) releases not only national but also census division house price indexes. Out of the nine census divisions, three posted negative monthly depreciation (adjusted to an annual rate) for July: South Atlantic at -7.88%, West South Central at -6.80%, and East South Central at -0.66%. The divisions with positive home price appreciation ranged from 2.02% in West North Central to 11.57% in East South Central. The FHFA HPI releases its metro and state data on a quarterly basis, which NAHB analyzed in a previous post. 

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