The cost of building a home is in decline

The most recent Producer Price Index (PPI) demonstrates that the prices paid for materials used in residential construction decreased 1.1percent in June, breaking up a four-month trend of increases.

The reduction in the PPI, published by the National Association of Home Builders (NAHB), is just the fifth time in the last two years where housing prices dropped.

Costs for construction materials have decreased by 1.6%, and June 2019’s decrease is a stark contrast from June 2017 to June 2018 when prices grew 8.8%.

Softwood lumber prices decreased by 1.7percent in June, that is the third-consecutive month of declines. Costs for softwood lumber stay at their lowest levels since February 2017.

Also seeing declines in June were costs for timber and plywood, which fell 2.3%. Prices paid for engineered wood and timber, and plywood has decreased by 23.1% and 17.6%, respectively, year-over-year.