Is Construction Really This Expensive These Days?
If you’ve gotten a quote for a renovation or new build recently, chances are you’ve had the same reaction most people do:
“There’s no way it costs that much… right? Costs can’t possibly have doubled since the pre-Covid era.”
Unfortunately, the reality is that construction pricing has become one of the hottest (and most confusing) topics for homeowners and developers alike because it seems so much more expensive than it used to be… and it is. What used to be a manageable investment can now feel shockingly out of reach. Even many contractors agree: the landscape has changed dramatically since 2018.
So what’s really going on? Is construction genuinely more expensive today? Or does it just feel that way?
The Short Answer Is: Yes, but It’s Complicated
Construction costs have climbed noticeably in the last several years, but the why behind it is worth digging into. Once you understand what’s driving those numbers, the pricing starts to make a lot more sense.
Most people experience sticker shock because they’re comparing today’s market to what projects cost before the industry went through a perfect storm of changes: pricing shifts, supply chain volatility, labor shortages, regulatory updates, and global economic disruptions.
Why Construction Feels So Expensive Right Now
1. Material prices have changed dramatically
The cost of materials like lumber, steel, concrete, insulation, and electrical components has risen significantly over the last few years. Even though pricing has stabilized in some categories, many materials never returned to pre-2020 levels. And it’s not just the raw materials, it’s also:
Shipping
Manufacturing delays
Threats of tariffs, then actual tariffs
Fuel prices
Limited supply in certain regions
When materials cost more and take longer to source, the entire project budget shifts.
2. Labor is more expensive… and scarcer
Construction has been battling a skilled-labor shortage for over a decade. Fewer workers entering the trades means higher demand for qualified professionals, which naturally pushes wages upward.
Brian Wolgamott, Lead Carpenter, Tectonic
Quality craftsmanship now comes at a premium, and for good reason.
More training and certifications
Higher safety standards
Increased project complexity
Fierce competition for experienced tradespeople
When labor is tight, timelines stretch… and costs follow.
3. Regulations and building standards have evolved
Modern construction isn’t the same as building 20 or even 10 years ago. Updated codes mean:
More structural requirements
Better insulation and energy efficiency
Enhanced safety standards
Stricter permitting processes
These are all good things: they result in safer, longer-lasting, higher-performing homes and buildings. But they also increase both labor and material requirements.
4. Customization is at an all-time high
Clients today want tailored spaces, designer finishes, smart-home tech, spa-like bathrooms, and open-plan layouts. All of those elements require more specialized labor, higher-end materials and extra planning and oversight.
Customization adds beauty and value, but it also adds cost.
5. The “hidden” costs add up quickly
Even simple projects include layers most homeowners don't think about, like:
Permit fees
Professional design
Engineering
Site preparation
Waste disposal
Insurance
Temporary utilities
Contingency planning
None of these are glamorous, but they’re essential… and increasingly expensive.
Are contractors overcharging?
In most cases, no. What clients often interpret as inflated pricing is actually the reflection of real costs behind the scenes. Contractors today are working within a tighter, more complex ecosystem than ever before. Good builders price responsibly so they can pay skilled labor fairly and absorb material volatility. They also need to maintain proper insurance and compliance while ensuring they don’t cut corners or compromise quality.
A “cheap” bid often signals shortcuts, omissions, or unrealistic numbers, not savings.
How to Navigate Today’s Construction Costs With Confidence
If construction feels more expensive, here are a few ways to put your mind at ease and go into the process with full confidence.
1. Get detailed, transparent estimates
A line-item estimate helps you see where the money is going and where you might adjust scope or finishes.
2. Get fixed-cost bids
Ask your contractor for a bid that has a fixed price with changes only for things that deviate from the original scope of work or which constitute major unforeseen circumstances. This should also be two different contracts: one for the design to permit process, and then another for the construction work itself.
3.Prioritize the big-picture goals
Not every upgrade has an equal impact. Focus on what actually adds value or improves functionality.
4. Be realistic about timelines
Rushed projects often cost more and perform worse. Give your contractor the time they need to do it right.
5. Expect a contingency buffer
Budgets today should include 10–20% contingency. It’s not a sign of sloppy planning but a reflection of modern construction realities.
The Bottom Line
Yes, construction is more expensive these days, but for reasons rooted in real changes to the industry.
Material prices, labor shortages, regulatory requirements, and higher consumer expectations have reshaped what projects cost today. Once you see the full context, the numbers feel less mysterious and more understandable.
The good news is, with thoughtful planning, transparent communication, and the right build partner, you can still achieve an incredible outcome, one that’s built to last and worth every dollar.
At Tectonic, we take pride in total transparency. You’ll know exactly what your project costs and why; you won’t be surprised by extended timelines. Delays do happen–that’s life!--but as soon as we know, you’ll know. We give you options based on the knowledge we hold, with years of experience and excellence in design build.
Yes, construction is more expensive than it used to be. But with Tectonic, you can trust that the payoff is the highest-quality builds and white-glove, like-it’s-our-own treatment of your property during construction.
Schedule a call today; we’re here to reshape how you think about construction and renovation.