Gypsum, OSB, and softwood lumber prices decline in January

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Overall, the price of goods used in residential construction declined 0.5% in January (not seasonally adjusted) according to the latest Producer Price Index (PPI) released by the Bureau of Labor Statistics. In contrast to December–when prices paid for building materials (except OSB) changed little–prices fell by an average of 2.9% in January.

Prices paid for inputs to residential construction (goods) increased 1.6% over the 12 months ending 2019, providing some relief relative to the 4.8% increase builders experienced between January 2017 and January 2018.

For the third consecutive month, OSB prices (NSA) declined the most in percentage terms (-6.1%).  Prices paid for OSB have decreased nearly 30% since October 2018 and have fallen more than 40% since hitting their most recent peak in June 2018.

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Softwood lumber prices remained relatively stable, falling 2.1%.  Between June and November 2018, prices paid for softwood lumber decreased 21%.  Since November, however, prices have declined just 0.8%.  The post-peak price trends of OSB and softwood lumber are shown below.

The price of gypsum products continued to exhibit high volatility, decreasing 3.7% (SA) in January.  Although the index for prices paid for gypsum products has only declined by 0.1% over the last 12 months, prices increased six of those months while declining in the other six.