The prices of goods used as inputs to residential construction increased 19% year-to-date according to the latest data from the Bureau of Labor Statistics Producer Price Index. Excluding energy, it has increased 12% while the index for final demand goods increased 7.2%. Although the prices of lumber have fallen drastically since historic highs, other material price increases have offset lumber price drops, says the National Association of Home Builders. Steel mill product prices have increased more than 80% since January 2021, followed by building paper and board mill products, which have increased by more than 50%.
Of goods inputs to residential construction, including lawn care products, the prices of these 10 have increased the most thus far in 2021:
- Steel mill products
- Building paper and building board mill products
- Plastic water pipe
- Fertilizer materials
- Laminated veneer lumber
- Thermoplastic resins and plastics materials
- Structural metal joists and concrete reinforcing bars
- Wood window and door frames
- Copper pipe and tube
Over the first seven months of 2021, the majority of these products’ prices have increased many times more than they did in 2020. The price change of steel mill products is the most glaring example, increasing 81.3% YTD following a 2020 increase of 11.1%.
The prices of a subset of building materials were stable in 2020 but have seen substantial price increases in 2021.