Led by softwood lumber, prices paid for goods used in residential construction continued their upward trend in July, increasing 1.8% (not seasonally adjusted) according to the latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics, the National Association of Home Builders reports. It is the third consecutive monthly increase since the index declined three months straight by a total 5.4%.
The index has decreased 1.3% year-to-date (YTD), a larger decline than the prior record for a July YTD decrease (-0.9% in 2000). Prices paid for goods used in residential construction have only fallen five times between January and June since 2000, NAHB says.
The increase in prices paid for building materials was led by a 11% increase in softwood lumber prices, NAHB shows. Since decreasing 10.8% in April, softwood lumber prices have risen 29.3% and are now roughly equal to prices paid during the peak of the early- to mid-2018 run up. Although prices paid for softwood lumber are near 2018 records in level terms, the YTD percentage increase in 2020 (+22.0) is far greater than it was in 2018 (+13.8%).
See more at NAHB’s Eye on Housing Blog.