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
Material Costs | Economics
Jul 02, 2026
U.S. Sawmill Output Continues to ShrinkThe lumber industry in the United States is showing signs of tightening capacity, a trend that could have implications for home builders if demand accelerates in the future.
Regulations
Jul 01, 2026
New York, California Appellate Courts Uphold Appliance Gas BansTwo federal appellate rulings issued days apart in New York and California upheld restrictions on gas-powered and other fossil-fuel appliances in new construction, dealing a setback for home builders, trade groups and labor organizations that challenged the laws.
Latest Economic News
Economics
Jul 02, 2026
U.S. Economy Adds 57,000 Jobs in JuneThe U.S. labor market lost momentum in June, with total nonfarm payroll employment rising by just 57,000, the smallest gain since February’s outright decline. Downward revisions to April and May payroll estimates subtracted a combined 74,000 jobs from previously reported totals, reversing the sizable upward revisions reported a month earlier and suggesting underlying hiring momentum was weaker than initially reported.
Economics
Jul 01, 2026
Residential Construction Spending Increases in May Due to RemodelingPrivate residential construction spending rose modestly in May 2026, marking the third consecutive month of gains, albeit at a slower pace. According to the latest construction spending data from the U.S. Census Bureau, private residential construction spending came in at a seasonally adjusted annual rate (SAAR) of $930.2 billion in May, up 0.3% from April and up 1.8% from a year ago.
Economics
Jun 30, 2026
Consumer Confidence Inched Up in JuneConsumer confidence inched up in June due to improved views of business conditions and recent declines in oil prices easing inflation fears.