Rising home prices depend on supply-and-demand dynamics, but there’s something else that also impacts home values: construction costs. After falling or remaining flat for three decades, construction costs for residential and commercial buildings have increased sharply since the mid-2000s, according to a recent study by Issi Romem, chief economist of BuildZoom, a service that links consumers with remodeling and new construction builders.

Construction costs have risen 24 percent since 2004, driven initially by higher material costs during the housing boom.

Rising labor costs were the main culprit for more expensive overall construction costs since then, according to Romem, particularly in cities with a higher cost of living. In coastal cities and remote locations such as Anchorage and Honolulu, construction costs are higher, while in the South, construction costs are the lowest. Material costs don’t vary much geographically, so the difference in costs is attributed to labor.

In some of the most expensive coastal cities, the study found, construction work has shifted to labor-intensive remodeling and renovation more than new construction. Along with wage growth, this has caused an increase in labor costs because of shortages.

The cities with the highest construction costs are New York, San Francisco, Chicago, Honolulu and Anchorage. Washington is ranked 49th of the 130 central cities in the study for construction costs.

For the full study, click here.