Continuing a string of steady increases, the prices of goods used in residential construction jumped 3.6 per cent in January, according to the latest Producer Price Index (PPI) report from the U.S. Bureau of Labor Statistics.
Softwood lumber prices saw the most significant change, rising 25.4 per cent last month, while indoor and outdoor paint prices averaged an increase of nine per cent.
The National Association of Home Builders (NAHB) reports that the PPI has climbed 8.4 per cent during the past four months following declines in August and September, resulting in a 20.3 per cent year-over-year increase in building material costs.
Similar price increases have been seen in Canada, according to the Canadian Home Builders’ Association, with CEO Kevin Lee telling Livabl that “an average 2,400 square foot house costs $68,000 more just because of lumber and materials than it did pre-recession. And that’s just construction costs, not the costs that come with delays.”
The 25.4 per cent jump in softwood lumber prices follows a 21.3 per cent increase in December. Overall, prices have surged 73.9 per cent since September 2021, as record high volatility continues to impact the residential construction industry.
The PPI for softwood lumber has fluctuated 12 per cent per month since January 2020, the highest 24-month average since data first became available. By comparison, softwood lumber’s PPI shifted an average of 0.3 per cent per month between 1947 and 2019.
Paint prices are also setting records. Exterior paint prices have increased 30.3 per cent year-over-year, while interior paint prices have risen 21.2 per cent during the last 12 months. Before the pandemic, the previous record for annual price growth was 8.5 per cent and 10.1 per cent, respectively, set in March 2019.
