By David Logan | Eye On Housing
Prices paid for goods used in residential construction climbed 1.8% in September (not seasonally adjusted) according to the latest Producer Price Index (PPI) report released by the Bureau of Labor Statistics. The index for inputs to residential construction, goods less food and energy (i.e. the “core”)—a less volatile price measure—increased 2.2% over the month. The core index for building materials has increased 4.0% since declining 0.6% in April and is up 4.4% year-to-date (YTD).
A 28.6% increase in prices paid for softwood lumber (seasonally adjusted) led the overall index higher and is the fourth consecutive double-digit percentage increase, month-over-month. Over the last five months, the PPI for softwood lumber has nearly doubled (+90.9%). Sharply higher lumber prices have added more than $17,000 to the price of an average new single-family home since mid-April.