June Marks Highest Yearly Increase in Building Material Prices Since February 2023
Inputs to residential construction (goods less food and energy) — which represent building materials used in residential construction — rose 0.19% in June, according to the most recent producer price index (PPI) report from the U.S. Bureau of Labor Statistics. In May, the index fell 0.26% after rising 0.22% in April.
Year-over-year growth has continued to climb this year — June’s increase of 2.65% was the highest since February 2023. Despite overall inflation declining, prices for inputs to residential construction have accelerated since the start of the year, leaving home builders to continue to deal with higher building material prices.
Specific increases include:
- Softwood lumber rose 3.41% in June, after falling 5% in May.
- Gypsum building materials were unchanged for the second consecutive month but were up 2.32% over the year.
- Ready-mix concrete rose 0.45% in June after rising a revised reading of 0.26% in May.
Meanwhile, steel mill products fell 1.18% in June after rising 0.54% in May, and copper fell 2.67% in June, the first monthly decline since February of this year.
Jesse Wade, NAHB director of tax and trade policy analysis, provides more details in this Eye on Housing post.