Starting around January 2021—not quite a year after COVID-19 was declared a pandemic—prices for building materials began increasing and continued to climb for the better part of two years. In May 2022 alone, year-over-year increases for nearly all fenestration-related materials were in the double digit percent range, with commodity flat glass having one of the lower increases at 9.8% over 2021.
Thermoplastic resin and plastic materials had the least increase from 2021 to 2022, at just 6.2%. Meanwhile, metal windows and doors had increased by more than 30% from the previous year.
May wasn’t the only month in which prices spiked. PPI reports from November 2021, December 2021, January 2022, March 2022, and April 2022 showed similar, double-digit percent change in pricing for fenestration materials. While there was a month here and there where one or two materials might have shown a slight price decrease, the numbers haven’t come down nearly as frequently as they increased.
Earlier this year, the National Association of Homebuilders (NAHB) reported that building material price growth slowed dramatically in 2023, in line with slowing inflation in the broader economy. Prices still grew, though, and were elevated from post-pandemic surges, the association says.
“The only major building material to see price recovery is lumber,” said Jesse Wade, NAHB director of tax and trade policy analysis, in a recent blog post on the NAHB website. “At the end of 2023, lumber was trading about 20% higher than in 2019, but with further price declines in 2024, the price is roughly back to normal. This is after surges in 2020-21 that saw lumber prices rise more than 300%.”
For other building material categories prices are still far above their pre-pandemic levels NAHB officials said. The organization looks at materials such as gypsum (used in drywall), concrete, and steel mill products used in homebuilding.
Though most point to the pandemic as the start of the rise in material prices, NAHB officials said the organization saw a change as early as late 2017, wherein “building material prices grew more than 5%, mostly driven by trade disputes for materials sourced overseas.”
“In the spring of 2020, supply and demand forces took over the lumber market,” said Wade, who continually tracks and analyzes short- and long-term trends in commodities pricing. “Home builders got back to work very quickly, and people stuck at home decided to invest in home repairs, renovations and upgrades. So lumber prices soared. But it wasn’t until early 2021 that other material prices began to rise.”
While the pandemic certainly exacerbated the supply and demand aspect of pricing, NAHB officials pointed to inflation as a hand-in-hand influencer. Global factors—not just the pandemic but the geopolitical climate, trade disputes and policies—are also continuous and ongoing, which in turn affect available supply, as well as inflation.
Regardless of cause, higher material costs translate to higher price tags on houses—especially newly built houses—which affects mortgages and rising home insurance premiums. At a time when mortgage rates and home prices are at multi-decade highs, rising costs for insurance and an environment of uneven valuation makes housing attainability much harder, the association said.