Price of Goods Used in Residential Construction Climb 3.6% Higher in May, 16.5% Year-Over-Year

According to the latest U.S. Bureau of Labor Statistic (BLS) Producer Price Index (PPI) with further analysis provided by the National Association of Home Builders (NAHB), the price paid for good used in residential constructions, less energy, rose 3.6% in May (not seasonally adjusted) and over the past 12 months have increased 16.5%. In fact, building materials (i.e., inputs to residential construction less food and energy) prices have declined just two times since December 2019. The index for inputs to residential construction, including food and energy, increased more (+4.1%) and is up 22.5%, year-over year. This increase closely mirrors the 26% increase found in a recent NAHB survey. Building materials prices have increased 9.4% year-to-date (YTD), in stark contrast to the 0.4% YTD seen in 2020. However, the 2021 increase YTD is an outlier when compared to pre-pandemic years as well, more than tripling the largest January-to-May increase since 2015 (the most recent data available). As an example, steel mill products prices climbed 2.4% in May, a substantial slowdown after three months during which increases averaged 15.9%. Even so, prices are up 75.4% over the past 12 months and have risen 59.4% in 2021 alone. The price for gypsum products, Redi-mix concrete and lumber also increased in May.