The producer price index (PPI) for inputs to residential construction rose 8.3% in 2022, a much smaller magnitude than the 18.9% growth in the PPI in 2021, according to an analysis by the NAHB. On a month-over-month basis, building materials prices fell 0.3% in December, marking the fourth consecutive monthly decline.

The PPI for softwood lumber (seasonally adjusted) fell 6.9% in December and 26.1% over the course of 2022. Since increasing the first three months of the year, the softwood lumber index has fallen 45.8%.

The PPI for gypsum building materials declined 0.2% in December but increased 17.6% over the course of 2022. Although the 2022 price increase was more than three times the 25-year average, it was substantially lower than the 23% increase seen in 2021.

The price index of services inputs to residential construction was unchanged in December after decreases in October and November. Prices rose 5.6% in 2022 after climbing 10.8% in 2021. In contrast to building materials, the index for services inputs increased substantially in 2020 as well (+10.0%). The 2020 increase was almost entirely driven by a large increase in building materials retailers’ gross margins.

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