The latest Producer Price Index (PPI) released by the Bureau of Labor Statistics indicates goods used as inputs to residential construction have risen 12.0% year-to-date (YTD) through July 2021. Softwood lumber prices, which held drive up construction prices during the early part of the year, are decreasing to help bring costs down. But, according to the National Association of Home Builders’ (NAHB) Eye on Housing blog, the decline in lumber prices is being offset by large increases in prices paid for other products, including laminated veneer lumber, steel mill products, building board mill products, structural metal joists, and wood window and door framings.
The PPI for August indicates prices paid for goods used in residential construction decreased 0.7%, largely driven by the continued decline in lumber and wood products prices. However, despite the monthly decline, building material prices remain 12.3% higher than they were at the beginning of 2021, according to the NAHB.
The PPI for softwood lumber decreased 27.7% in August and has declined 49.0% since May. While the direction of the index value change suggests a return to more normal price levels, the continued volatility remains a concern, according to the NAHB. Price volatility for softwood lumber remains at an all-time high for a 12-month period.
