Construction costs in the U.S. went up an average of 4% last year and will continue to increase across the country in 2024, according to data from Currie & Brown.
Phoenix is expected to be one of the hardest hit markets with increases reaching as high as 6%.
While increases are happening everywhere, there is a disparity as to the sizes in various markets. While Phoenix may see 6% increases, Chicago is “only” expected to rise 3.5%.
Other notable markets and their expected construction cost increases include New York and Houston at 4%; Miami, Seattle and Minneapolis at 4.5%; San Francisco and Washington, D.C. at 4.75%, and Portland at 5%.
The report cites international turmoil, nervousness about Federal Reserve actions on interest rates, and the upcoming U.S. presidential election as contributors, along with ongoing inflation across the overall economy.
Other contributors include stricter sustainability rules temporarily creating higher prices while markets adapt, as well as the ongoing shortages in materials and skilled labor. Labor costs are expected to increase between 3% and 6% this year. (Source)