Building material costs increased for a fifth straight month, but single-family construction activity shows signs of growing this year based on early 2024 data, government reports showed.
Prices for residential construction goods increased a nonseasonally adjusted 0.21% in March, slowing from the
On a year-over-year basis, material prices came in 2.22% higher in March.
The first rise in softwood lumber costs since last summer helped lead to the overall increase, with prices climbing a seasonally adjusted 1.9% between February and March. But lumber prices are still 6.76% lower on an annual basis.
"This yearly decline was the 17th straight, as lumber prices in 2023 were much more stable than the prices between 2020 and 2022," wrote NAHB economist Jesse Wade.
COVID-related disruption led to volatility throughout the builder supply chain between 2020 and 2023, most noticeably in lumber costs. While prices were down year over year, the PPI for lumber was almost 6% higher when compared to March 2020.
Similarly, gypsum materials also jumped 2.24% on a monthly basis to finish at a new high, with costs now 1.33% above year-ago levels. Prices moved up for the second consecutive month after almost a year of decreases. Gypsum data is not seasonally adjusted.
Seasonally adjusted ready-mix concrete prices also registered a monthly uptick of 0.05% in March and now sit 7% higher annually.
Among the material costs tracked by NAHB, steel-mill products recorded the only monthly drop, with a nonseasonally adjusted decline of 7.77% in March. The fall was the largest in over two years. Compared to 12 months earlier, prices for steel-mill goods finished 3.59% lower.
While material costs continue to rise, the outlook for
According to NAHB,
Single-family permit growth appeared across all regions, with the largest increase of 54.2% in the West. The Midwest registered a jump of 42.7%, with the South seeing a 34.6% rise. The Northeast lagged the rest of the U.S., but permits in this region still rose 22.2% on an annual basis.
The ten leading states accounted for two-thirds of all permits issued in January and February, with Texas leading the way at 26,454. Houston and Dallas saw the greatest number among the top markets, with 8,679 and 7,578, respectively.
A total of 48 states posted year-over-year increases in issuances, ranging from 106.4% growth in Montana to 3.3% in neighboring North Dakota. Only Alaska, Rhode Island and the District of Columbia reported decreases.
On the multifamily side, though, permit numbers fell 22.2% to 78,259 from a year ago, with only 21 states reporting growth. Two regions, the Northeast and Midwest, saw issuances go up by 95.7% and 15.2%, while the South and West recorded 39% and 37.7% declines from the same time a year ago.
