➤ Key Highlights

As of April 2026, construction materials costs ~+6.0% vs a 2024 baseline; total project costs ~+3.0% (off mid-2025 peaks near +9%).
Steel projected +15–35% in 2026; copper +25–50% on electrification and tight supply; aluminum/copper/steel parts carry 50% tariffs.
Aggregate input material prices up ~7% YoY and 6.2% in the first four months of 2026 alone.
Construction insurance premiums have risen three consecutive years on claims inflation and reinsurance tightening.
The 2026 oil/Hormuz shock adds fresh input-cost and logistics pressure on top of tariffs.

➤ SIGNAL

The cost-inflation story didn't end — it changed shape. Materials had been easing off the summer-2025 tariff peak, but a +6% materials line and a +3% total-project line are still a feasibility tax on every ground-up deal. Layer in steel and copper moving 15–50% and the new oil shock raising energy and freight, and the all-in cost to build is grinding higher again at the exact moment debt is most expensive.

The under-discussed multiplier is insurance. When replacement cost rises, insured values rise, and premiums priced off value rise with them — a third straight year of increases. For a developer, that compounds the problem twice: higher hard costs and higher carrying costs on the completed asset, both eroding the yield-on-cost that justifies breaking ground.

Implications

Developers: Re-run feasibility with steel/copper escalators and current insurance quotes — pro formas built on 2024 inputs understate cost by mid-single digits or more.
Owners/operators: Insurance is behaving like a second interest rate; budget it as a structural NOI drag, not a line item.
Lenders/investors: Cost re-inflation widens the spread between replacement cost and acquisition price — strengthening the case for buying existing assets below build cost.➤ TAKEAWAY