Building material prices saw a decline in September; however, ready-mix concrete prices continue to rise rapidly. Gypsum prices did drop in price, but are up more than 20% over last year. Along with the slowing economy and housing market, the latest Producer Price Index (PPI) report showed a decrease of .3% for building materials in September.
Building material prices have declined 2.3% since June, making it the largest three-month drop since April 2020. However, material prices were already at extremely elevated rates and there have only been modest price decreases. Lumber and steel have seen a drop in price over the last few months, but ready-mix concrete and gypsum building materials have continued to rise in cost dating back to early 2021.
Gypsum is a major component of drywall and a critical ingredient in the Portland cement used to produce ready-mix concrete. The supply of domestically produced ready-mix concrete and gypsum has been spread thin due to a high demand of cement and lower imports of aggregate because of a quarry shutdown in Mexico.
The PPI for softwood lumber shows a slightly less decline in September (2.9%) compared to August (5.2%); however prices are still 14.5% higher than it was a year ago. Softwood Lumber prices have dropped 39.6% since March, but remain 41.9% above pre-pandemic levels. There has also been a decrease in steel mill products in September at 6.7%, bringing the decline in price 16.1% over the past four months. Steel mill products are nearly double their pre-pandemic levels despite the index at its lowest level since June 2021.
Ready-mix concrete increased, for the sixth consecutive month, by 1.4% in September. Over the past year the index has increased 11.6% with an 8.9% year-to-date increase. This increase is the largest September YTD increase in the series’ 34-year history. The South region is seeing the highest increase in ready-mix concrete prices. Gypsum building materials did see a .2% drop in September, being the secondly monthly decrease in two years. Gypsum prices have increased 20.2% over the past year and have risen 46% since January 2020.
Craftmaster Custom Homes recommends taking your time and doing your research when it comes to building your custom Hill Country Home. We are here to help make the process of building your dream home as stress-free as possible. If you have any questions about building your custom dream home in the Hill Country of New Braunfels or have any other questions please reach out to us! We are always available for a consultation and would love to hear from you!