Building Material Prices Show Growth In July

Residential building material prices, excluding energy, rose 0.4% in July and were up 5% from a year ago. The year-over-year percentage increase in building materials was the highest since December 2022.

Energy prices fell 2.4% in July but were 33.1% higher than a year ago. Meanwhile, prices for services were down 0.3% over the month but were 6.2% higher than a year ago.

The Producer Price Index for final demand was unchanged in July after falling 0.1% in June. Compared to a year ago, final demand prices were up 4.7%. The index for final demand services rose 0.2% in July, while the index for final demand goods fell 0.7% over the month. 

The goods component has a larger importance to the inputs to residential construction price index, representing around 60% of the total. On a monthly basis, the price of input goods to new residential construction was up 0.1% in July after falling 0.7% in June.

The input goods to residential construction index can be further broken down into two separate components: one measuring energy inputs and one measuring remaining goods. The latter of these two components represents building materials used in residential construction, which comprise around 93% of the goods index.

Among building materials, softwood lumber prices rose significantly (7.4%) over the month and were up 17.3% from one year ago. Ready-mix concrete prices were down 0.4% over the month and have only risen 2.2% from a year ago.

Jesse Wade, NAHB director of tax and trade policy analysis, shares more in this Eye on Housing post.