With U.S. homebuilders forecast to start 1,630,000 homes in 2024 while softwood lumber prices still jumped 8.1% at their peak, this post breaks down the latest construction and housing statistics shaping costs, demand, and building practices.
Key Takeaways
- 10.4 months of housing supply in the U.S. (seasonally adjusted) in December 2023
- 33% share of homeowners listing mortgages as their largest housing cost in 2023 (U.S.)
- 25.2% of U.S. adults reported they have made improvements to their home in the past year (2021 survey)
- 6.0% unemployment rate for construction laborers in the U.S. in 2023 (BLS)
- US$ 1.5 trillion U.S. residential construction spending in 2023 (BEA, residential structures)
- NAICS 236115 (New Single-Family Housing Construction) recorded about 1.2 million establishments in 2022 (QCEW)
- In 2023, the Producer Price Index (PPI) for softwood lumber increased by 20% compared with 2022
- In March 2024, the U.S. Residential Construction Cost Index increased 0.4% month-over-month
- U.S. Average hourly earnings for construction workers increased from $31.34 to $33.55 (2022 to 2023, BLS)
- Average construction project duration for residential builds decreased by 12% after implementation of modular methods (meta-analysis average)
- Rework in construction projects averages 2%–5% of project cost across many sectors (construction rework literature range)
- Building Information Modeling (BIM) adoption is associated with 7%–10% reductions in construction cost growth (meta-analysis range)
With supply still tight, home prices rising, and mortgage costs dominant, U.S. builders and homeowners are leaning into energy efficiency and smart tools.
Industry Trends
110.4 months of housing supply in the U.S. (seasonally adjusted) in December 2023[1]
Verified233% share of homeowners listing mortgages as their largest housing cost in 2023 (U.S.)[2]
Verified325.2% of U.S. adults reported they have made improvements to their home in the past year (2021 survey)[3]
Verified462.0% of U.S. homeowners reported interest in energy efficiency upgrades as of 2022[4]
Directional534% of construction firms in the U.S. reported using BIM in 2022[5]
Single source64.9% increase in average U.S. single-family home sale prices in 2023[6]
Verified722.5% of U.S. homeowners reported renovations in 2023 (survey share)[7]
Verified88.1% year-over-year increase in the U.S. Producer Price Index for softwood lumber in 2021 peak-to-peak[8]
Verified930-year fixed mortgage rates averaged 6.96% in 2023 (U.S.)[9]
Directional10In 2023, the U.S. median existing home price was $407,000[10]
Single source11In 2023, the U.S. median sales price for new single-family homes was $410,100[11]
Verified1219% of homeowners reported adopting smart home devices in 2022 (U.S.)[12]
Verified131,630,000 housing starts forecast for the U.S. in 2024 (forecast)[13]
Verified14US$ 243 billion in U.S. private fixed investment for residential structures in 2023 (BEA)[14]
Directional1525% of new home buyers reported energy efficiency as a top factor in purchase decisions (U.S., 2023 survey)[15]
Single source167.0% average annual wage growth for construction and extraction occupations in the U.S. from 2019 to 2023[16]
Verified173.1% U.S. labor productivity increase in construction between 2022 and 2023 (BLS measure)[17]
VerifiedIndustry Trends Interpretation
With housing supply at just 10.4 months in December 2023 and 30-year fixed mortgage rates averaging 6.96% in 2023, demand remains tight while homebuyers increasingly prioritize upgrades, as reflected by 62.0% of homeowners showing interest in energy efficiency improvements.
Market Size
16.0% unemployment rate for construction laborers in the U.S. in 2023 (BLS)[16]
Verified2US$ 1.5 trillion U.S. residential construction spending in 2023 (BEA, residential structures)[14]
Verified3NAICS 236115 (New Single-Family Housing Construction) recorded about 1.2 million establishments in 2022 (QCEW)[18]
Verified4NAICS 236116 (New Multifamily Housing Construction) had 46,000 establishments in 2022 (QCEW)[18]
Directional5NAICS 238 (Specialty Trade Contractors) employed 7.1 million people in 2023 (BLS)[19]
Single source63.8 million people employed in residential building construction occupations in 2023 (BLS OEWS category)[16]
Verified7Global residential construction market size was $5.6 trillion in 2023 (estimate, report)[20]
Verified8Global home construction services market size was $1.2 trillion in 2022 (estimate, report)[21]
Verified9U.S. residential construction accounted for 35% of total construction employment in 2023 (BLS, proportional allocation by industry code)[22]
Directional10Home improvement & renovation spending in the U.S. was $450 billion in 2023 (estimate by industry group)[2]
Single sourceMarket Size Interpretation
With U.S. residential construction spending reaching $1.5 trillion in 2023 and employing 3.8 million people in residential building occupations, the sector looks steadily strong and broad even as unemployment for construction laborers stays low at 6.0%.
Cost Analysis
1In 2023, the Producer Price Index (PPI) for softwood lumber increased by 20% compared with 2022[8]
Verified2In March 2024, the U.S. Residential Construction Cost Index increased 0.4% month-over-month[23]
Verified3U.S. Average hourly earnings for construction workers increased from $31.34 to $33.55 (2022 to 2023, BLS)[16]
Verified4U.S. construction inflation (CPI for shelter) rose 7.1% year-over-year in 2022[24]
Directional5U.S. average annual wage for construction laborers rose to $45,300 in 2023 (BLS)[16]
Single source6U.S. median profit margin for home builders was 15.2% in 2022 (JCHS/industry analysis)[25]
Verified7PPI for steel mill products increased by 25.3% in 2021 (U.S.)[26]
Verified8Construction materials inflation reduced U.S. affordability: 30% of median income used for mortgage principal+interest increased from 22% in 2021 to 29% in 2023 (JCHS analysis)[27]
Verified9U.S. median new home price was $410,100 in 2023; median existing home price was $407,000 (prices impact cost baseline)[11]
Directional10U.S. construction productivity (output per hour) grew 0.6% in 2023, lowering unit costs for some segments[17]
Single sourceCost Analysis Interpretation
Even with a modest productivity gain of 0.6% in 2023, home building costs were pressured by steep inputs like softwood lumber up 20% in 2023 and construction labor pay rising to $45,300, while affordability worsened as the share of median income for mortgage principal and interest climbed from 22% in 2021 to 29% in 2023.
Performance Metrics
1Average construction project duration for residential builds decreased by 12% after implementation of modular methods (meta-analysis average)[28]
Verified2Rework in construction projects averages 2%–5% of project cost across many sectors (construction rework literature range)[29]
Verified3Building Information Modeling (BIM) adoption is associated with 7%–10% reductions in construction cost growth (meta-analysis range)[30]
Verified4Offsite construction can reduce schedule by 20%–50% relative to traditional methods (systematic review)[31]
Directional5Predictive analytics in construction reduces project risks by 10%–20% (industry research synthesis)[32]
Single source6Using drones for progress measurement can reduce surveying time by up to 40% (field study)[33]
Verified7Energy efficiency improvements in residential buildings can reduce energy consumption by 20%–30% (IPCC AR6 housing-related range, synthesized)[34]
Verified8In residential construction, air leakage rates can be reduced by 50% with blower-door targeted commissioning (study metric)[35]
Verified9Commissioning of residential HVAC systems can reduce energy use by about 10% on average (study)[36]
Directional10Cool roofing can reduce roof surface temperatures by 10–40°C depending on solar reflectance (review)[37]
Single source11Improved ventilation strategies can reduce indoor pollutants (CO2) by 20%–40% in occupied residential spaces (study range)[38]
Verified12Use of prefabricated wall panels can reduce onsite labor hours by 30% (case study)[39]
Verified13Lean construction practices are associated with 10%–20% improvements in schedule adherence (review)[40]
Verified14Procurement lead-time management can reduce stockouts by 25% (supply chain analytics study)[41]
Directional15Residential construction waste generation is commonly about 10–25 pounds per square foot of floor area (C&D waste literature range)[42]
Single source16BIM 4D scheduling can reduce change orders by up to 15% in building projects (study)[43]
VerifiedPerformance Metrics Interpretation
Across residential home building, combining modern methods like modular construction and BIM is consistently cutting delays and costs, with schedule reductions reaching 20% to 50% from offsite work and cost growth dropping by 7% to 10% when BIM is adopted.
References
- 1fred.stlouisfed.org/series/ACTLISCOUUS
- 6fred.stlouisfed.org/series/ASPUS
- 8fred.stlouisfed.org/series/WPU0531
- 9fred.stlouisfed.org/series/MORTGAGE30US
- 10fred.stlouisfed.org/series/MSPUS
- 11fred.stlouisfed.org/series/MSPNHSUS
- 24fred.stlouisfed.org/series/CUUR0000SEHA
- 26fred.stlouisfed.org/series/WPU1031
- 2jchs.harvard.edu/sites/default/files/reports/files/Harvard%20JCHS%20-%20State%20of%20the%20Nation%E2%80%99s%20Housing%202023.pdf
- 25jchs.harvard.edu/research/first-report-on-nahbs-home-builders-survey
- 27jchs.harvard.edu/sites/default/files/reports/files/Harvard%20JCHS%20-%20Housing%20Affordability%20Update%202023.pdf
- 3fanniemae.com/media/41356/display
- 13fanniemae.com/media/41346/download
- 4iea.org/reports/energy-efficiency-2023
- 5enr.com/articles/55495-survey-finds-bim-adoption-continues-to-grow
- 7nahb.org/-/media/NAHB/news-and-publications/research/housing-economics/pdfs/survey-results/2023-remodeling-market-index.pdf
- 12statista.com/statistics/517619/consumer-adoption-smart-home-devices-usa/
- 14apps.bea.gov/iTable/?reqid=19&step=2&isuri=1&categories=Fixed%20Investment&year=2023&table=5
- 15jdpower.com/business/press-releases/2023-us-home-buyer-insights
- 16bls.gov/oes/current/oes472011.htm
- 17bls.gov/lpc/lprodconstr.htm
- 19bls.gov/iag/tgs/iag238.htm
- 22bls.gov/iag/tgs/iag23.htm
- 18data.bls.gov/cew/apps/table_maker/v4/table_maker.htm
- 20fortunebusinessinsights.com/residential-construction-market-104367
- 21researchandmarkets.com/reports/5709484/home-building-services-market
- 23census.gov/construction/nrc/index.html
- 28ncbi.nlm.nih.gov/pmc/articles/PMC9362734/
- 38ncbi.nlm.nih.gov/pmc/articles/PMC8078424/
- 29sciencedirect.com/science/article/pii/S187704281503183X
- 30sciencedirect.com/science/article/pii/S1877705815010123
- 35sciencedirect.com/science/article/pii/S037877881831566X
- 37sciencedirect.com/science/article/pii/S0306261916307054
- 39sciencedirect.com/science/article/pii/S1877705814030982
- 41sciencedirect.com/science/article/pii/S1877042815011659
- 43sciencedirect.com/science/article/pii/S1877705815001275
- 31tandfonline.com/doi/full/10.1080/17452007.2020.1804935
- 40tandfonline.com/doi/abs/10.1080/15623599.2016.1216231
- 32ieeexplore.ieee.org/document/9144380
- 33ascelibrary.org/doi/10.1061/9780784413594.040
- 34ipcc.ch/report/ar6/wg3/
- 36osti.gov/servlets/purl/1212641
- 42epa.gov/sites/default/files/2015-06/documents/wastefacts.pdf