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Higher nominal housing prices would improve economic efficiency, and the costs of construction are an important determinant of housing prices. The big news today is that construction costs are significantly higher than they were 9 months ago.

The chart below shows how construction costs stopped falling in the first half 2009, and now have increased significantly. Today's BLS estimate of Mar 2010 construction costs is part of the increase; another part comes from recent BLS revisions of the 2009 data (for pre-revision data, see here).

Click to enlarge:

Source: A Look at Housing PPI 'Wow' Numbers