Will new-home costs go back to pre-COVID levels?

If you’re thinking about building a new home in the Northwoods, you’ve probably asked: will prices ever go back to what they were before COVID? Short answer: not entirely — at least not across the board and not quickly. Here’s a clear, practical breakdown of why, what has improved, what hasn’t, and how to plan for it when building with True North Custom Homes.

What pushed prices up in the first place

During and after the pandemic we saw several forces push framing and overall home-building costs much higher: dramatic material shortages and spikes (lumber being the poster child), disrupted supply chains, labor shortages, and new policy/tariff uncertainties that raised import costs for building products. Those shocks combined with high demand for housing created multi-year price pressure. Recent tariffs and trade actions continue to add headwinds for some key materials.

What’s improved — and why this matters for you

Some of the most volatile items have calmed down:

• Lumber — after the huge rollercoaster in 2020–2021, lumber prices have largely normalized compared with the pandemic spike, which helps framing and roof costs. That’s been a meaningful relief compared with the 300%-plus spikes we saw early on.

• Commodity price outlook — broad commodity pressure has eased in many areas and major international forecasts expect commodity prices to decline toward pre-pandemic ranges over the next couple of years, which should moderate some input costs.

So: good news — some big swings are behind us, which lowers the chance of surprise, jaw-dropping increases like we saw in 2020–21.

What’s still elevated and likely to stay higher than “pre-COVID” for a while

Even though lumber has softened, many other inputs remain meaningfully above pre-COVID levels: steel, drywall, insulation, some appliances, and transportation/freight costs. Labor costs — especially skilled trades — are higher because the construction industry still has a tight labor market in many regions. Tariffs and trade policy can also add thousands to the cost of a single family home. In short, while a few line items are back to “normal,” overall build cost normalization is slower.

Industry forecasts show moderate construction inflation continuing rather than a wholesale rollback to 2019 prices — most forecasts for residential construction inflation in 2024–2025 are in the low-single digits (e.g., ~4–5% range for residential construction inflation), which implies costs are still rising, just more slowly. That’s important when you budget multi-year projects.

So — how likely is a full return to pre-COVID pricing?

Unlikely in the short term (1–3 years) and only partially likely longer term. Reasons:

• Some materials and inputs have structural changes (new tariffs, re-shoring of supply chains, changes in global demand) that keep costs above where they were in 2019.

• Labor shortages and higher wages for skilled trades are a persistent regional and national issue.

• Macro factors (inflation, interest rates, commodity cycles) still matter; even if commodity prices fall, service/labor costs and regulatory costs will likely keep total build cost higher than pre-COVID for many projects.

That said, some specific material costs (notably framing lumber) have already returned to near-pre-pandemic levels, so your final cost depends on your design choices, finishes, and how exposed your project is to the still-elevated categories.

What this means for True North Custom Homes clients in the Northwoods

Practical takeaways to protect your budget and get the home you want:

1. Expect a new baseline, not a short-term reversion. Plan budgets and contingencies around a realistic, slightly higher baseline than 2019.

2. Lock pricing where you can. If suppliers or subcontractors will guarantee prices for a period, that can give you predictability. For long lead items (appliances, windows, HVAC), consider ordering earlier.

3. Use allowances strategically. Work with us to set allowances that reflect current market realities so changes later don’t blow up your budget.

4. Value-engineer thoughtfully. Substitute materials that give the same performance/look for less cost, while keeping durability for our harsh winters. We’ll recommend options that keep your thermal envelope and long-term maintenance in mind.

5. Plan contingencies (5–10%). Given continuing uplift in some inputs and possible tariff shifts or freight disruptions, a modest contingency prevents unpleasant surprises.

6. Timing matters. If your schedule is flexible, we can time purchases and starts to minimize exposure to near-term spikes; however, be cautious — delaying too long risks material/labor cost increases and interest rate changes.

How True North helps

At True North Custom Homes we’ve built and remodeled across the Northwoods for decades. That means:

• Local trade relationships — we negotiate and source regionally to reduce freight and timing issues.

• Realistic, up-to-date estimating — we use current supplier quotes and construction inflation forecasts to set expectations that match today’s market.

• Wisconsin-seasoned detailing — we prioritize durable, energy-smart choices that reduce lifetime costs even if upfront material prices are a bit higher.

Bottom line

A full roll-back to pre-COVID total home build prices is unlikely in the near term. Some materials (like lumber) have returned close to pre-pandemic levels, and commodity forecasts point to easing in time, but labor, certain materials, tariffs, and structural supply-chain shifts mean the “new normal” for total build cost is likely a bit higher than 2019 for a while. That doesn’t mean you can’t control costs — good planning, early buys for long lead items, smart allowances, and working with a local experienced builder like True North will get your project built on budget and built to last.