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
Housing Affordability
Aug 14, 2025
NAHB Spotlights Housing Affordability Issues at National and Local LevelNAHB and the Building Industry Association of Washington (BIAW) recently spotlighted housing affordability struggles at both the local and national level in a two-part series titled “Washington to Washington: The Housing Crisis.”
Education | Remodeling
Aug 13, 2025
How Remodelers Can Capitalize On The State of The Housing MarketThe housing affordability crisis in conjunction with an aging housing stock are signaling a high demand for remodels. With nearly half of owner-occupied houses in the U.S. built before 1980, home owners are choosing to invest in updating their current homes, making this the perfect time for remodelers to market themselves.
Latest Economic News
Economics
Aug 14, 2025
Building Material Prices Rise in JulyPrices for residential building materials rose again in July, marking the largest year-over-year increase in over two years. The underlying price growth trend remained the same, with service prices continuing to grow at a faster pace than goods prices. Similar to last month, parts for construction machinery and metal molding/trim experienced significant price growth, as both increased over 25% compared to last year.
Economics
Aug 13, 2025
U.S. Economy Rebounded in Second QuarterReal GDP growth rebounded in the second quarter, driven by a turnaround in the trade balance and stronger consumer spending.
Economics
Aug 12, 2025
Student Loan Balances RiseOverall consumer credit continued to rise in 2025, but the pace of growth remains slow. Student loan balances also rose year-over-year as borrowers resumed payments following the end of pandemic-era relief.