In a welcome development for home builders, a recent report shows that materials prices have eased over the past year
Sept. 16, 2024
Image: myphotobank.com.au / stock.adobe.com
Building material prices are now slightly lower compared with last year.
Despite continuing economic uncertainty and elevated construction costs, which remain at close to 40% above what they were in February 2020 before the onset of the COVID-19 pandemic, there are signs that builders may get some relief in the coming months, Construction Dive reports.
Analysis of U.S. Bureau of Labor Statistics' Producer Price Index data for August 2024 by Associated Builders and Contractors, a national construction industry trade association, shows that although construction input prices did increase slightly in August, materials prices eased overall during the past year. That easing, combined with a less constrained labor market and the likelihood that the Federal Reserve will start lowering interest rates at its next meeting is good news for home builders.
Overall construction costs ticked up 0.1% in August, according to ABC’s analysis of U.S. Bureau of Labor Statistics released Thursday. Over the past year though, inputs to construction decreased 0.7%, while nonresidential costs ticked down 0.9%. “Construction input prices are now down almost a full percentage point over the past year,” said Anirban Basu, ABC chief economist. “This is a welcome development for contractors.”
