Residential building material prices increased at a slower rate in January, according to the Bureau of Labor Statistics’ most recent Producer Price Index report.
This was the first drop in the rate of price growth since April of last year. costs for metal products continue to rise, while costs for certain wood products fall.
The Producer Price Index for final demand rose 0.5% in January, following a 0.4% rise in December.
The January increase in final demand is directly related to a 0.8% increase in prices for final demand services. In January, the index for final demand items declined by 0.3%.
In January, the price index for inputs to new residential construction increased 0.7%, bringing it up 3.3% from the previous year.
The cost of products used in new home building increased by 0.9% this month and 2.4% year on year.
Meanwhile, service prices increased by 0.3% month on month and 4.7% year on year.
Input Goods
The goods component is more important in terms of inputs to the residential building price index, accounting for around 60%.
In January, the monthly price of input commodities used in new home building increased by 0.9%.
The input items to the residential construction index are further divided into two different components, one assessing energy inputs and the other measuring leftover products.
The latter of these two components basically indicates building materials utilized in residential construction, accounting for around 93% of the goods index.
In January, energy input prices declined 0.9%, bringing them down 10.3% from the previous year.
Building material prices rose 1.0% in January and 3.3% year on year, the smallest year-on-year price increase since July of last year.
Metal products continue to have the most significant year-over-year price rises. Metal molding and trim ranked first in January, with prices rising 48.3% from the previous year.
Nonferrous metal and cable costs have increased by 19.7% in the last few months.
Wood products have seen the greatest price drops over the past year, with particleboard and fiberboard down 24.4%, treated wood products down 5.0%, and softwood lumber down 3.3%.
Input Services
In January, prices for residential building service inputs increased by 0.3%. Service input prices rose by 4.7% year on year.
The price index for residential building service inputs is divided into three parts: trade services, transportation and warehousing services, and services other than trade, transportation, and warehousing.
The most important component is trade services (about 60%), followed by other services (approximately 29%), and finally transportation and warehousing services (around 11%).
The largest component, trade services, increased by 7.1% compared to last year.
Transportation and warehousing services increased by 2.0%, while other service costs increased by 1.1% during the year.
Increased Inputs into New Construction
New experimental data on inputs for new construction was just released in the BLS PPI.
The data adds to existing industry index inputs by combining import prices with domestically produced products and services.
Users can utilize this new data to track how industry input costs change for both domestically produced and imported items.
This data concentrates on new construction, however the full dataset has indexes for a variety of industries, which may be viewed on the BLS website.
Domestically produced goods and services have the greatest impact on new construction input prices, accounting for 90% of the weight of the industry index.
Imported commodities account for the final 10% of the index.
According to the most recent data available, for November 2025, domestically produced items continue to rise at a quicker rate than imported goods utilized in new construction.
The domestic products index rose 3.0% year on year, while imported goods prices fell 3.0%.
[Read more about this topic on Eyeonhousing.org]