Prices for building materials like softwood lumber and steel mill products fell for the third consecutive month in September, but costs for ready-mix concrete continue to rise at a rapid pace, according to NAHB’s latest Producer Price Index (PPI) report.
Building materials prices have fallen 2.3% since June, the largest three-month drop recorded since April 2020, but September’s modest declines follow months of price volatility throughout the COVID-19 pandemic.
The PPI for softwood lumber (seasonally adjusted) dropped 2.9% in September after falling 5.2% in August, and while softwood lumber prices are up 14.5% year-over-year, they have fallen 39.6% since March. The index remains 41.9% above pre-pandemic levels after peaking above $1,600 per 1,000 board feet in May 2021.
Steel mill products have fallen 16.1% over the last four months following a 6.7% decline in September, and though the index is at its lowest level since June 2021, prices of steel mill products are nearly double their average pre-pandemic levels, NAHB reports.
While softwood lumber and steel mill products prices are decreasing, the PPI for ready-mix concrete (RMC) rose 1.4% in September for the sixth consecutive month. The index is up 11.6% year-over-year and has climbed 8.9% year-to-date, marking the largest September YTD increase in the RMC data's 34-year history.
The most recent monthly RMC price increase was most prevalent in the South region, where prices rose by 2.6% in September. RMC prices also rose 0.3% in the West but fell 0.7% in the Northeast and were flat in the Midwest, the September PPI report revealed.
Prices for gypsum building materials have risen 20.2% over the past year and are up 46.0% since January 2020, but the September PPI revealed a slight 0.2% decline, the second monthly decrease posted in two years.
Even as single-family construction cools, prices for in-demand building materials remain elevated as a result of lingering supply chain disruptions, but a housing reset could slow price growth in the months ahead if consumer demand continues to fall, NAHB says.