Some building materials prices show respite from surge

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A reduction in prices for steel and gypsum products helped slow steady gains in building materials costs last month, according to the Bureau of Labor Statistics.

Still, overall prices rose 1.6% for the month, according to the latest Producer Price Index (PPI) Report published by the Bureau of Labor Statistics. Building material prices were up 20.4% year over year and 31.3% since January 2020.

The biggest decline was in steel products, according to an analysis by the National Association of Homebuilders.

Prices for steel products fell 9.9% in February, the second consecutive decline after increases in each of the previous 15 months. The last time the PPI for steel products fell more than 9% was in December 2008, the NAHB said. However, the PPI remains 74.4% higher than 12 months ago.

Gypsum products also posted a price decline, falling 1.9% in February, ending an 11-month bull run in which the index climbed 31.4%. Prices for gypsum products increased 20.7% year over year.

Meanwhile, the PPI for softwood lumber rose 2.6% in February, following a combined increase of 28.9% in the previous two months. Since hitting their most recent low in September 2021, prices are up 79.5%. According to data from Random Lengths, the “factory price” for structural lumber has more than tripled since late August.

Additionally, the PPI for ready-mixed concrete rose 0.8% in February after rising 1.1% in January. The ready-mixed concrete index has been relatively volatile since mid-2020 and climbed 8.2% year-on-year. Prior to January 2021, year-over-year price increases had not exceeded 8% since December 2006.

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