Why Construction Prices Aren’t Going Down Anytime Soon

For the last few years clients have been telling us they are waiting for construction prices to “come back down.” They’ve been holding off on projects, expecting the market to correct itself. The hard truth? That’s not going to happen and waiting could cost more in the long run.

Construction costs have fundamentally reset. While the wild price swings of the pandemic have stabilized, today’s higher costs are the new normal. Here’s why.

1. Skilled Labor Shortages Are Here to Stay

The most significant driver of construction costs is people — and there simply aren’t enough skilled workers.

• The industry has faced a persistent shortage of tradespeople for over a decade.

• Many seasoned workers are retiring faster than new talent is entering the field.

• Younger generations are only slowly beginning to fill the gap, and training takes years.

To stay competitive, contractors must pay higher wages and offer better benefits to attract and retain quality team members. Labor costs rarely move backward, and this upward wage pressure directly impacts every project budget.

2. Material Prices Have Stabilized — at Higher Levels Lumber, steel, concrete, and electrical components no longer fluctuate wildly like they did in 2020–2022. However, they haven’t returned to pre-pandemic levels and they likely won’t.

• Global supply chain disruptions permanently raised the baseline cost of manufacturing and shipping.

• Fuel, energy, and transportation costs remain elevated.

• Material suppliers have adjusted pricing to reflect these ongoing realities.

Even if short-term dips occur, they’re minor and temporary. The new pricing floor is simply higher.

3. Regulatory and Insurance Costs Are Climbing

The cost of compliance is rising across the industry.

• Building codes are becoming stricter, especially regarding energy efficiency, structural resilience, and worker safety.

• Meeting these codes often requires more specialized labor, additional inspections, and higher-quality materials.

• Insurance, bonding, and workers’ compensation premiums have also climbed steadily, adding another layer of cost to every project.

These costs rarely decrease. They ratchet up and stay up.

4. Demand Still Outpaces Supply

Even with higher interest rates and economic uncertainty, demand for construction remains strong.

• Maine faces a significant housing shortage.

• Qualified contractors have full schedules and long backlogs.

This supply-demand imbalance means there’s no market pressure pushing prices down. If

anything, tight schedules and high demand will continue to keep costs elevated.

What This Means for Property Owners

Waiting for construction prices to drop is not a winning strategy. The market is not going to “go back to normal” — this is the new normal.

The smartest approach is to plan and build strategically:

• Establish realistic budgets early.

• Work with an experienced contractor who can guide scope and design to align with costs.

• Prioritize efficiency, clear communication, and value engineering to control expenses.

At NU-YAR Construction, we focus on delivering projects with precision, transparency, and cost discipline. We can help you navigate today’s pricing realities and move forward with confidence.

Start the Conversation Now

If you’re considering a construction project, the best time to start is now — not when costs “go down.” Because they won’t. Let’s talk about how to move your project forward strategically, on time, and on budget.