Buffalo’s construction sector is under pressure from a booming housing market and constrained supply. The city was named the hottest housing market in the U.S. for 2025, with demand outpacing new construction and pushing project costs upward. This dynamic is intensifying cost pressures for contractors and construction managers in the region. Nationally, non-residential building costs rose approximately 3.6–3.8% year-over-year in early to mid‑2025, reflecting rising labor, material, and equipment costs. These trends are mirrored locally, where project budgets must account for tight labor markets and volatile input prices.
Buffalo projects are experiencing upward cost pressure due to high demand and limited supply. While specific figures vary by project type, contractors should anticipate elevated cost ranges compared to prior years, particularly in residential and commercial sectors.
Trade labor, journeyman, and subcontractor rates are rising amid a tight labor market. Nationally, construction wages have increased, and the wage “premium” for skilled labor remains elevated—indicating that retaining experienced tradespeople commands a higher rate than in other industries.
Equipment rental rates—whether daily, weekly, or monthly—are influenced by demand surges and supply chain constraints. Contractors should plan for higher-than-average hire costs, especially for specialized or heavy machinery.
Buffalo’s permit process is increasingly digital, with ePermits and appointment systems streamlining submissions. However, in-person appointments remain necessary for certain permit types. Inspections must be scheduled at key construction milestones, and final certificates are required to close out projects.
