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
Sustainability and Green Building
Apr 30, 2025
NAHB Mourns Passing of Member Kim ShanahanNAHB mourns the passing of Kim Shanahan, who played an integral role in the Sustainability & Green Building Subcommittee and Healthier Homes and Communities Subcommittee.
Awards | Sustainability and Green Building
Apr 30, 2025
Global Innovation Home of the Year Brings Wellness to Production Home DesignERTH360, a home design and architecture firm based in Ontario, has spent years focused on bringing wellness concepts to production home design. Its design won the Gold award for GIA Global Innovation Home of Year at NAHB’s The Nationals for 2024.
Latest Economic News
Economics
Apr 30, 2025
U.S. Economy Contracted in First Quarter of 2025The U.S. economy contracted in the first quarter of 2025 for the first time in three years, driven by a sharp surge in pre-tariff imports, softening consumer spending, and a decline in government spending.
Economics
Apr 30, 2025
House Sharing is Not Just for Young AdultsA record-high 6.8 million households shared their housing with unrelated housemates, roommates or boarders in 2023. While college-age and young adults make up the largest subset of house sharers (close to 41%), this type of living arrangement is gaining popularity among older householders fastest, with the 55+ segment accounting for 30% of all house-sharing households in 2023.
Economics
Apr 29, 2025
Jobs Openings Fall as Economy SlowsConsistent with soft sentiment data, the count of job openings for the overall economy and construction fell in March as employers slowed hiring plans amid a broader economic slowdown, per the March Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS).