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
Economics
Jun 15, 2026
Builder Sentiment Remains Weak Amid Affordability ConcernsBuilder confidence in the market for newly built single-family homes fell two points to 35 in June, according to the NAHB/Wells Fargo Housing Market Index (HMI) released today. This is the 14th straight month that sentiment has remained below 40, a streak not seen since 2011-2012 during the foreclosure crisis.
Spring Leadership Meeting | Remodeling | Workforce Development | Economics
Jun 12, 2026
Podcast: NAHB Puts Residential Construction Front and Center on the HillOn the latest episode of NAHB’s podcast, Housing Developments, CEO Jim Tobin and COO Paul Lopez are joined by NAHB member David Price, a remodeler from Greenville, N.C., to talk about his experience at NAHB’s Legislative Conference and his perspective on the current housing market.
Latest Economic News
Economics
Jun 12, 2026
Single-Family Permits Continue to Decline Through April as Multifamily Activity StrengthensThrough April 2026, residential construction activity remained uneven across housing sectors. Single-family permitting continued to soften compared with a year ago, reflecting persistent affordability challenges and elevated borrowing costs, while multifamily permitting posted solid gains supported by stronger activity in several regions.
Economics
Jun 11, 2026
Residential Building Material Prices Rise at Highest Rate In Over Three YearsWholesale prices of goods used in residential construction rose in May as energy prices continued to climb.
Economics
Jun 10, 2026
Inflation Surpassed 4% in MayInflation accelerated to a new three-year high in May, driven by continued increases in energy costs from the Iran war. Energy costs drove more than 60% of the monthly increase, with national gasoline prices jumping more than a dollar since the war began.