Will Home Construction Costs Go Down in 2023?

Home construction estimation

Will home construction costs go down in 2023? As the cost of materials and tools continues to meet the rising demand steadily, it’s not likely that construction costs will go down in 2023. There are several reasons for this situation, which are important to review before building a home. 

The Increase in Material Costs

One of the key reasons construction costs are not expected to decline in 2023 or for the foreseeable future is the steady increase in the price of materials over recent years. While a more stable flow of availability is expected in the future, the demand will continue to grow alongside supply, possibly outpacing it.

For this reason, construction costs will also increase due to the demand for raw materials and supplies. If you live in a region with relatively easy access to most building materials, you may find certain items, such as lumber or steel, will fluctuate in price.

When working with construction professionals and home builders, this significantly affects their operations, as they will need to order for your home building project and many others, which may lead to higher home construction costs and, in some cases, delays.

Calculating the cost of building materials

The Price of Land

While the cost of supplies and materials impacts labor and, therefore, the overall home construction costs, the price of land also increases. For some time, the cost of housing, whether you buy a pre-owned house or the land for building, has increased over time.

As this trend continues, there are rising material costs, which means developers and construction service companies pay more. This steady increase is common in most regions, which means you’ll see a consistent price increase in material, labor, and land cost nearly everywhere, with some variance in the housing market.

How Inflation Impacts the Cost of Labor

As the cost of living also increases, alongside the demand and price of raw materials, land, and construction costs, the home builder must pay their workers more, which often leads to an increase in the overall price of building projects.

While this factor isn’t necessarily going to impact what’s paid for materials, it means what you pay for your new custom-built home will incorporate these raises into the overall cost. Labor shortages in some regions can cause issues with the availability of qualified construction workers, project managers, and experts with the necessary skills to build your home.

This issue may stem from a lack of available resources or training in certain areas or a lack of incentive for workers to upgrade their skills and certification due to the rising cost of living and challenging financial situations.

What Helps Keep Prices Down?

It can be challenging to keep up with the rising residential construction costs, especially when planning your new home-building project. Fortunately, there are a few areas that can help you reduce costs, avoid delays, and keep the prices down now and into the future.

Focus on Sustainable Designs

While it’s difficult to control the impact of the supply chain and growing demands for various materials and resources in the construction industry, building a sustainable home can help you avoid extra expenses and the need to order additional services in the future.

When you implement sustainable solutions for your new home, you’ll enjoy the benefits of less upkeep and repairs to maintain a functioning house. Additionally, you’ll avoid the volatile nature of supply chains, a continuing increase in demand, and inflation, which is expected to occur in 2023 into the future.

Partnerships Between Construction Service Companies and Suppliers

When there is a decrease in the availability of materials or resources, this can significantly delay your home-building project. Construction service companies often strive to work around these issues by building strong relationships with area suppliers to improve the flow of raw materials and labor services.

While a partnership doesn’t guarantee supply chain disruptions won’t impact a new homeowner, it can give construction companies and developers greater access once these resources become available. 

Furthermore, some suppliers offer better rates for developers and construction service companies if a certain amount of materials or labor services are purchased for multiple projects simultaneously. This favors how well house-building projects progress, especially when service providers maintain an inventory of certain items available when possible.

Planning Ahead

The more you plan ahead, the better prepared you’ll be for unexpected changes in the market. You may want to secure construction services well before your building project so that careful planning and purchases can be made to avoid potential delays or changes in the market.

While the cost of materials, labor, and land can fluctuate at any time, you’ll have an advantage when you buy ahead or at least consider how the change in pricing can impact your budget.

Budget Your Costs and Financing Options

You may have considerable savings available for your new home or need to implement a budget and work with a financing plan. It’s important to establish a realistic budget that you can work with, and share with your construction service company, as this will determine what options are open to you.

While you may want to implement specific items, such as a solarium, garage, or similar structure, it’s crucial to determine if these preferences, along with luxury finishes and interior designs, can be done later when more money is available. 

If you’re working with a limited budget, focusing on a simple design plan and size while planning to implement additions or upgrades later is often the best option for new homeowners.

You’ll also want to determine which type of financing is available to fund your project so that you can be prepared for higher costs in the future. 


When you work with Dan’s Construction Service, you’ll find a suitable solution that meets your personal budget. We offer custom building services to help you build the home of your dreams while working through the rising costs of materials and labor.

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