The cost of building materials used in residential construction increased again in March—the fifth month in a row—according to the National Association of Home Builders' reporting on the most recent Producer Price Index (PPI) data from the U.S. Bureau of Labor Statistics.
For the first time since July 2023, the seasonally adjusted PPI for softwood lumber rose, increasing by 1.9% between February and March. But it's worth noting that lumber prices were still 6.76% lower in March 2024 compared with 2023 data, and prices in 2023 and the first quarter of 2024 have been far more stable than between 2020 and 2022.
In other price news, gypsum building materials saw a non-seasonally adjusted PPI increase for the second straight month (up 2.24% in March following a 2.95% bump in February), which is 1.33% higher than a year ago. And the PPI for ready-mix concrete (seasonally adjusted) also continued on an upward trajectory, rising 0.05% in March following a 0.84% increase in February. Over the year, ready-mix concrete prices were 7% higher. By contrast, the PPI for steel mill products (not seasonally adjusted) took a 7.77% dive in March—the largest month-over-month drop since February 2022—after seeing steady increases during the previous three months.
The non-seasonally adjusted index increased 0.21% in March following a 0.54% increase in February and a 1.25% in January. The data indicates that index increases are slowing, but the index is still continuing to grow at a faster pace than during 2023—the average monthly change in 2023 was 0.15%. Additionally, the index increases for the first three months of 2024 mirrors previous years, showing consistent monthly increases for January, February and March. The last time the index did not increase in March was 2019. Over the year, the index was up 2.22% in March, slightly lower than the February yearly increase of 2.23%.
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