Q3 Residential Construction Trends
Note: September 2025 data was released late due to the recent government shutdown. All figures in this update now reflect the final data.
The residential construction market stayed steady through Q3. Costs are still rising, but these increases are generally expected and in line with what builders have been forecasting for the past year. Overall construction input costs were up about 3.5 percent year over year, and supply chains continue to be reliable.
Producer Price Index (PPI)
Material Costs: Steady With a Few Increases
Most key materials saw only small changes this quarter. Lumber and concrete were both up just a little over 2 percent, and glass increased around 4 percent. These are modest shifts and fall well within normal cost movement for residential builds. Steel had the biggest increase at about 9 percent, driven by tariffs and tight supply, but this mostly affects structural components or specialty steel items.
For most homeowners, these trends mean that material pricing remains predictable. Outside of steel-heavy designs, these increases are not expected to significantly impact overall project budgets. Builders can plan around them early in the process.
Key Commodity Pricing
Tariffs: Mainly Affecting Steel
Tariffs are still creating upward pressure on steel prices, while other materials remain mostly unaffected. If your home design relies on structural steel or steel-intensive features, your builder may recommend planning purchases earlier to stay ahead of any pricing changes. For most builds, the impact is minimal.
Washington State Labor Costs
Labor Costs: Rising, but More Slowly
Construction wages in Washington continue to climb, but at a slower pace than the last few years. A 4 to 5 percent increase is typical right now. This steady, moderate growth makes it easier to plan out labor expenses when you are budgeting your build. There are fewer surprises than we saw during the post-pandemic spike.
The Bottom Line
The construction environment heading into late 2025 is stable and predictable. Material and labor costs are still increasing, but at a manageable pace. Even with the delayed September data, the overall picture remains clear: this is a steady market to plan a home build or renovation. Early budgeting and solid planning continue to go a long way in keeping projects on track as we move into 2026.