The cost of building homes is going up.
The latest Producer Price Index release by the Bureau of Labor Statistics shows that prices of softwood lumber, gypsum, ready-mix concrete and OSB all rose in February. The increases were led by gypsum products, with softwood lumber a close second.
After falling in four of the past five months, the price of softwood lumber jumped 4.8% in February. This was the biggest increase in four years and largely due to the ongoing softwood lumber trade dispute between the U.S. and Canada. Some softwood products rose as much as 30% during the three-week period from Jan. 27 through Feb. 17. However, Random Lengths weekly price data shows that framing lumber prices have either held steady or slightly declined since Feb. 24.
Meanwhile, gypsum prices posted a 5.3% jump in February, the largest monthly increase since January 2015. Prices rose by a total of 6.2% in the first two months of this year. NAHB will pay close attention to whether this rise is an isolated phenomenon or the start of an upward trend.
OSB and ready-mix concrete prices climbed by 3% and 0.5%, respectively, in February.
NAHB economist David Logan provides more pricing analysis in this Eye on Housing blog post.