Building Materials Price Growth Plummets in 2023

According to the latest Producer Price Index (PPI) report, growth in the average price level of inputs to residential construction less energy (i.e., building materials) fell from 15% in 2022 to 1.3% in 2023 (not seasonally adjusted). On a monthly basis, building materials prices rose 0.1% in December after increasing 0.1% in November (revised). Monthly price increases averaged 0.2% in 2023, down from 1.5% in 2021 and 0.7% in 2022.
Here is a breakdown by building material:
Softwood Lumber: The PPI for softwood lumber (seasonally adjusted) declined 2.3% in December, the third consecutive decrease and the fourth over the past five months. The index has fallen 14.5% since reaching its 2023 high in July.
On an annual basis, prices declined 31.3% in 2023 after falling 3.2% in 2022. Although the 33.5% two-year decrease is massive in historical terms, prices remain 22.7% above the 2019 level as the index skyrocketed 84.6% between 2019 and 2021.
Gypsum Building Materials: The PPI for gypsum building materials declined 0.3% in December and have not increased since March 2023. The index decreased 2% over the past 12 months, after increasing 44.6% over the two years ending December 2022.
Ready-Mix Concrete (RMC): RMC prices decreased 0.2% in November (seasonally adjusted), just the fourth decline over the last 36 months, because of a 0.9% price decline in the South; prices in the Northeast, Midwest, and West regions were unchanged. The average price of RMC increased 11.2% in 2023 and 10.3% in 2022 (NSA), combining for the second-largest two-year increase since 2000.
Steel Mill Products: Steel mill products prices climbed 3.3% in December, the first increase since May. Steel mill products annual average prices declined 16.1% in 2023 after increasing 8.7% in 2022 and the historic 90.3% increase of 2021. Prices are 31.2% lower than their 2021 peak but remain 65.1% higher than they were in January 2020.
David Logan, NAHB director of tax and trade policy analysis, provides more details in this Eye on Housing post.
Latest from NAHBNow
Sep 05, 2025
Mortgage Rates Hit 10-Month Low in AugustAverage mortgage rates in August continued their steady decline and are now at their lowest rate since last November. But rates are still higher year over year.
Sep 04, 2025
Home Building Lot Shortage ContinuesAlthough lot shortages are not quite as widespread as they were in 2021, obtaining lots remains a challenge for many home builders, according to recent results from the NAHB/Wells Fargo Housing Market Index (HMI) survey.
Latest Economic News
Sep 05, 2025
Job Growth Slowed in AugustJob growth slowed sharply in August, and the unemployment rate rose to its highest level in nearly four years.
Sep 04, 2025
Lots Still in Relatively Short SupplyAlthough shortages are not quite as widespread as they were in 2021, obtaining lots remains a challenge for many builders, according to recent results from the NAHB/Wells Fargo Housing Market Index (HMI) survey.
Sep 04, 2025
HVAC in New Construction in 2024Almost all of new single-family homes started in 2024 used either an air/ground source heat pump or a forced air system for the primary heating equipment (97%), according to the Census’s Survey of Construction. Additionally, 20% percent of homes also used a secondary type of heating equipment.