NEWPORT BEACH, Calif. – Despite strong increases since 2020 and 2021, building materials prices rose by only 0.4 percent in July, according to the Producer Price Index (PPI) from the Bureau of Labor Statistics.
Prices for softwood lumber increased marginally year over year in July, while prices for concrete products had their largest year-to-date increase in the history of the PPI, according to the National Association of Home Builders.
Since January 2020, prices for building materials have increased 35.7 percent with around 80 percent of that increase occurring since January 2021.
The PPI for ready-mix concrete gained 2.5 percent in July and has increased in 17 of the last 18 months. This is the largest increase since prices climbed 3.7 percent in March 2006. The index had the largest year-to-date (YTD) July increase in the series’ 34-year history at 6.8 percent.
The PPI for softwood lumber (seasonally adjusted) increased a modest 2.3 percent in July. Prices have fallen 28.2 percent YTD, although the extent to which the decrease has reached homebuilders and remodelers is unclear.
The price of truck transportation of freight decreased 0.3 percent in July, the second consecutive decline after two years of monthly increases. Over the past year, the indexes for local and long-distance motor-carrying prices are up 18.9 percent and 22.6 percent, respectively.
The PPI for the arrangement of freight and cargo increased 95.1 percent in 2021. Although prices have fallen 8.8 percent YTD, they remain 63 percent above pre-pandemic levels.
The Texas Real Estate Research Center has a wealth of economic information online for free.