Rising lumber and concrete prices helped drive an overall uptick in building costs last month according to the National Association of Home Builders, but some signs of moderation in other types of material have emerged.
Building supply costs edged up by 0.4% in July, with increases in lumber and concrete particularly helping lead to a continued upswing according to the
Extremely volatile lumber prices, impacted by supply chain issues, have been the catalyst behind much of the upward movement during that time. In July, lumber costs headed back upward by 2.3%, after falling in two of the previous three months. A month earlier, lumber costs had plunged by 22.6%. "Prices have fallen 28.2% year-to-date, although the extent to which the decrease has reached home builders and remodelers is unclear," wrote David Logan, director of tax and trade policy analysis at NAHB.
Meanwhile, ready-mix concrete jumped by 2.5% in July, the biggest one-month hike since 2006. Prices have gone up in 17 out of the last 18 months and have risen 6.8% year to date, NAHB said.
Ready-mix concrete was not the only type of product seeing a pronounced increase in price. Prices on finished concrete items have surged by 14.4% in the past year, while structural concrete block is also up 12.9%.
Although costs remain elevated, recent trends point to possible moderation for builders.
Helping temper the monthly rise in homebuilding materials was a decrease in steel-mill product prices, which fell 3.7% in July. The cost of gypsum supplies saw no change on a monthly basis. Fueled in part by falling energy prices, inputs to residential construction declined 1.2%.
Although trends suggest some possible price moderation in supplies, the homebuilding industry still faces
Builder confidence in the market for newly constructed single-family homes fell for the eighth month in a row to
"We expect new home sales and single-family housing starts to slow considerably in the coming months," they said in a research summary. "With all the discounting, new home prices should decline substantially."