According to the latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics, the prices of goods used in residential construction ex-energy (not seasonally adjusted) climbed 0.5% in April, following upwardly revised increases of 1.9% and 2.4% in March and February, respectively.
This adds up to an 4.9% increase in building materials prices since the start of 2022. Building materials prices are up 19.2% year over year and have risen 35.6% since the start of the pandemic.
Specific material increases include:
In the slideshow below, there are two separate quotes for lumber: One from April 2021, one from May 2020. Notice the difference in the cost of a standard 2x4 stud. This is a fraction of the total lumber package for a new home in North Carolina with a sales price in the $300s. Lumber production must increase.
As we all know, Lumber Prices have been on the rise for a while now, with no decline in price in sight. This not only affects the building industry directly, but, it also affects home buyers and homeowners looking to remodel.
A lumber industry veteran told CNBC on Thursday he expects the hot lumber market to persist, at least for a few more months, keeping both prices and volatility elevated.
NAHB - As lumber prices remain sky high, home-building activities continue to suffer across all aspects of the industry — including remodeling projects. Home owners have had an opportunity while sheltering in place to examine their homes and identify key areas in need of repair. But many have been apprehensive to tackle these projects because of the uncertain costs and availability of project materials.