Prices for
Building-material costs climbed up a monthly 0.49% between January and February, based off analysis from NAHB of the Producer Price Index. The movement eased off the 1.27% jump in January but still ended up above the 0.15% average monthly pace throughout 2023. Compared to one year ago, February building costs were up 2.18%, excluding food and energy.
If trends hold, the December-to-January rise will be the largest of all 12 months, as it was in both 2023 and 2022 when they leaped 1.07% and 4.05% respectively. The index is not seasonally adjusted.
Price gains were driven by gypsum materials, ready-mix concrete and steel mill products, while softwood lumber costs declined for the seventh month in a row. Seasonally adjusted lumber prices fell 2.98% in February and are 10.35% lower year over year.
The drop in lumber prices likely reflect typical seasonal demand. "Prices for lumber will likely start to creep upwards as single-family home construction enters the spring season and demand for lumber increases," NAHB researchers wrote in its analysis.
On the other hand, gypsum materials headed higher for the first time in 11 months, accelerating a nonadjusted 2.95% from January. But after the prolonged period of lower costs, gypsum prices finished February lower by 0.18% on a year-over-year basis.
Steel-mill products took a similar-sized 2.86% jump, higher for the third month in a row. Compared to 12 months ago, the cost of steel goods for residential building was up 5%.
Ready-mix concrete inched up an adjusted 0.25% in February, after rising 1.76% a month earlier. Prices finished 7.42% higher from a year earlier.
The latest data comes after single-family residential construction starts slowed by its greatest pace
The Producer Price Index for final-demand goods, including food and energy, rose overall by 1.2% on a monthly basis after it edged down 0.12% a month earlier.
