Building Materials Prices Inch Higher in November

According to the latest Producer Price Index (PPI) report, the price level of inputs to residential construction less energy (i.e., building materials) increased 0.2% in November after declining 0.4% in October (revised, not seasonally adjusted). The index has increased 0.8% (not seasonally adjusted) year to date, marking the smallest year-to-date gain through November since it fell 0.2% over the first 11 months of 2019. Prices have increased 36% since February 2020.

Individual building materials primarily saw decreases or remained unchanged:

• Ready-Mix Concrete: Prices gained 0.1% in November (seasonally adjusted) as monthly price growth slowed for the second consecutive month. Year-over-year price growth also decelerated for the second month straight and has declined to 9.4% since reaching its 2023 high of 13.3% in May (not seasonally adjusted).
• Gypsum Building Materials: The PPI was unchanged in November after falling slightly in October (not seasonally adjusted). Gypsum building materials prices last increased in March 2023 and have declined 1.6% year to date.
• Steel Mill Products: The price decreased 1.5% in October (not seasonally adjusted). The index for steel mill products prices has declined each of the past six months by a total of 13.9% and is at its lowest level since March 2021.
• Softwood Lumber: Price declines accelerated in November as the index dropped 5.8% (seasonally adjusted), more than double the October decrease. The index has fallen 19.7% over the past 12 months (not seasonally adjusted) and is lower than it has been at any point since March 2020.

David Logan, NAHB director of tax and trade policy analysis, provides additional sector details and price insights in this Eye on Housing post.