Building Material Costs Continue to Surge

A recent decline in lumber prices is helping to mitigate building costs, but that effect is being offset by numerous increases in other building materials that are surpassing records. Home building materials have climbed by up to 19% over the past year, according to the Bureau of Labor Statistics Producer Price Index.

The building materials that have seen the largest increases so far in 2021, according to the National Association of Home Builders’ Eye on Housing blog, include:

Steel mill products
Building paper and building board mill products
Asphalt
Plastic water pipe
Fertilizer materials
Laminated veneer lumber
Thermoplastic resins and plastics materials
Structural metal joists and concrete reinforcing bars
Wood window and door frames
Copper pipe and tube

Source: National Association of Home Builders

The price change in steel mill products has been most notable, climbing 81% year over year. That follows an 11% increase in 2020.

The median sales price of a new home in July was $390,500, an 18.4% increase compared to a year earlier, according to the Commerce Department. Builders say the higher prices are due to the increases in development costs, including materials, that are being passed along to home buyers.

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