The construction cost index (CCI) published by Insee for the first quarter of 2026 stands at 2,084 points, down 2.89% year-on-year after a peak reached in early 2024. This decline marks a turning point after several years of continuous increases. Several factors converge to explain this movement, and the question of its sustainability deserves to be posed with precision.
CCI Decline: What This Construction Cost Indicator Really Measures
The CCI does not reflect the purchase price of a new home. It measures the production cost borne by construction companies to build new homes, including materials, labor, site expenses, and margins. Its decline means that the overall pressure on these expense items is decreasing.
This 2.89% decline comes after a cumulative increase of over 30% between 2020 and 2023 according to the data from the materials cost index (MCI) monitored by BâtiZoom. Prices are therefore not returning to their pre-crisis levels. They have stopped rising and are beginning to decline in certain segments, as detailed by Projet Immobilier with projections by expense item.
The distinction between stabilization and actual decline matters. An index that drops a few points from a historically high plateau does not signal a return to 2019 rates. It indicates a loosening of the constraints that weighed on the construction sector.
Weak Demand and Deteriorating Business Climate: The Mechanism That Holds Prices Back
Insee indicates that in July 2026, the business climate in construction remains deteriorated. Entrepreneurs perceive a slight rebound in expected prices, but within a still fragile market context. This apparent paradox can be explained by a simple mechanism.
When construction demand is low, companies lose their pricing power. They cannot fully pass on their cost increases to clients, for fear of losing contracts. The competition among companies to secure available projects drives quotes down.
- Housing starts surged by nearly 30% in the first half of 2026 compared to a low point, but this rebound starts from a historically low level according to Médicis Immobilier Neuf.
- Construction output declined in June 2026 in the eurozone compared to May 2026, according to Eurostat, which reduces pressure on prices from subcontractors and European suppliers.
- Building permits are on the rise again, but the volume remains insufficient to create sustained tension on the supply of labor and materials.
This imbalance between an available supply of companies and still modest demand creates a favorable negotiating environment for project owners.
Energy and Materials: Cost Items That Are Easing in 2026
The surge in energy prices between 2021 and 2023 had directly increased the cost of producing cement, glass, steel, and insulation materials. These energy-intensive materials represent a significant portion of the overall cost of a construction project.
In 2025, the MCI reached 117.1, the same level as in 2024 according to BâtiZoom. The stabilization of energy costs has halted the escalation in these areas. For 2026, the easing continues: less dynamic European industrial activity reduces demand for raw materials, which alleviates order prices.
Construction timber has seen a relative calm since the shock of 2021, when prices were multiplied by North American demand. Steel fluctuates between stabilization and occasional tensions related to tariffs and geopolitical flows, but without returning to the peaks of 2022.
Materials to Watch for a Construction Project in 2026
Cement and glass remain the most exposed to a rise in case of an increase in gas prices. Bio-sourced insulators, driven by demand linked to RE2020, maintain a price trajectory oriented upwards. The choice of materials now weighs as heavily as the choice of the builder in the budget equation of a project.
Resumption of Construction and RE2020 Standards: Factors Limiting Price Declines
The decline in construction costs is neither linear nor guaranteed. Two opposing forces are slowing the movement.
The resumption of housing starts, with nearly 157,000 homes begun in the first half of 2026, could recreate tensions on skilled labor if it accelerates. The construction sector still suffers from a structural deficit of workers, and any sudden acceleration of construction would drive labor costs up.
The RE2020, which is being gradually implemented, imposes requirements for energy performance and carbon footprint reduction that increase the cost of materials and techniques. The growing use of bio-sourced materials, efficient ventilation systems, and enhanced insulation solutions adds a structural cost that the temporary decline in conventional materials does not fully offset.
These two dynamics – the resumption of activity and regulatory constraints – explain why the price of construction in 2026 is declining modestly rather than significantly. The market is easing without collapsing.
Construction Budget 2026: What Changes for a Home Project
For an individual launching a new home project, the current window presents a more favorable balance of power than in 2023 or 2024. Companies are more willing to negotiate, supplier lead times are shortening, and the validity of quotes is extending.
Three points deserve particular attention before signing:
- Check the price revision clause indexed to the BT01 index, which tracks the actual evolution of construction costs and can fluctuate both upwards and downwards during the project.
- Compare quotes on the most sensitive lots to price variations (structural work, insulation, carpentry) by asking for the validity period of supplier prices.
- Anticipate the additional cost related to RE2020, which represents an unavoidable item but reduces energy charges during use.
The decline in the CCI does not automatically translate into a decrease in the price displayed by builders. It gives them more margin, which they can choose to retain or redistribute depending on local competitive pressure. A market where permits are increasing but buyers remain cautious favors this redistribution.
The first half of 2026 confirms a technical reversal in production costs, without erasing the increases accumulated since 2020. The trajectory will depend on the speed of the resumption of construction and the evolution of energy prices in the coming months.