Building materials prices have been on an upward trajectory since December 2019 and are now 12.4% higher compared to one year ago. Costs for building materials have dipped just twice since December 2019, according to the National Association of Home Builders and the Bureau of Labor Statistics’ Producer Price Index. In April alone, costs for goods used in residential construction increased 1.7%. Steel mill products are experiencing a price volatility greater now than it has since the Great Recession with prices increasing 17.6% in March and another 18.4% in April.
Over the past three months, prices have climbed 22.0%. Perhaps more concerning than rising prices is that the pace of price changes has quickened each of the past nine months.
Prices paid for softwood lumber (seasonally adjusted) rose 6.5%, setting a new record high for the third consecutive month. Lumber prices have remained extremely volatile since the 88.5% increase between April and September 2020. Since falling 22.9% between September and November, the softwood lumber PPI has risen 52.0%.
In addition to nominal price movements and tariffs on Canadian lumber, cross-border purchasers are affected by the strength of the U.S. dollar relative to the Canadian dollar. The USD has depreciated 5.0%, year-to-date, and 13.1% over the past 12 months.