Page 22 - Builder Brief August 2025

E C O N O M Y
METALS AND
EQUIPMENT DROVE
MATERIAL PRICES
HIGHER IN JUNE
Residential building material prices rose in June, driven
primarily by higher construction machinery and equipment
part prices, based on data from the most recent Producer
Price Index (PPI). Metal commodities also experienced
significant increases, following recently implemented tariffs
on steel and aluminum.
Prices for inputs to new residential construction —
excluding capital investment, labor, and imports — rose
0.7% in June, following a (revised) flat change in May.
Meanwhile, price growth for services used in construction
continues to outpace both domestic and imported goods.
The inputs to the New Residential Construction Price Index
grew 2.6% from June of last year. The index can be broken
into two components: The goods component increased
2.1% over the year, while services increased 3.3%. For
comparison, the total final demand index, which measures
all goods and services across the economy, increased 2.3%
over the year, with final demand with respect to goods up
1.7% and final demand for services up 2.7%.
Impact of Tariffs
Tariffs on building materials do not directly show up in the
PPI data because the PPI measures prices for domestically
produced goods and services. In fact, tariffs and taxes are
explicitly excluded from the PPI. Despite this, price changes
in reaction to tariffs are included in the PPI, meaning price
increases to pass on increased costs of materials will show
up in this pricing data. Announced tariffs in recent months
have resulted in material increases across a few different
goods, specifically certain metal products and equipment.
In June, the largest year-over-year price increase was
for construction machinery and equipment parts, reporting
a 24.2% increase. Meanwhile, metal molding and trim
prices were up 15.1%, fabricated steel plate prices were
up 13.6%, ornamental and architectural metal work prices
were up 9%, and fabricated structural metal prices were up
9% compared to last year. Metal commodities have been
the primary targets of tariffs, with 50% tariffs in effect on
steel and aluminum products and a potential 50% tariff on
copper products coming this August.
Jesse Wade, NAHB director of tax and trade policy
analysis, provides more in this Eye on Housing post.
22 AUGUST 2025 | GREATER SAN ANTONIO BUILDERS ASSOCIATION
BUILDER CONFIDENCE
EDGES UP IN JULY
Builder confidence for future sales expectations received
a slight boost in July with the passage of the One Big
Beautiful Bill Act but elevated interest rates and economic
and policy uncertainty continue to act as headwinds for
the housing sector.
Builder confidence in the market for newly built single-
family homes was 33 in July, up one point from June,
according to the National Association of Home Builders
(NAHB)/Wells Fargo Housing Market Index (HMI) released
last month. Builder sentiment has now been in negative
territory for 15 consecutive months.
“The passage of the One Big Beautiful Bill Act provided
a number of important wins for households, home builders
and small businesses,” said NAHB Chairman Buddy Hughes,
a home builder and developer from Lexington, N.C. “While
this new law should provide economic momentum after a
disappointing spring, the housing sector has weakened in
2025 due to poor affordability conditions, particularly from
elevated interest rates.”
Indeed, the latest HMI survey also revealed that 38%
of builders reported cutting prices in July, the highest
percentage since NAHB began tracking this figure on a
monthly basis in 2022. This compares with 37% of builders
who reported cutting prices in June, 34% in May and
29% in April. Meanwhile, the average price reduction was
5% in July, the same as it’s been every month since last
November. The use of sales incentives was 62% in July,
unchanged from June.
“Single-family housing starts will post a decline in 2025
due to ongoing housing affordability challenges,” said
NAHB Chief Economist Robert Dietz. “Single-family permits
are down 6% on a year-to-date basis and builder traffic in
the HMI is at a more than two-year low.”
The HMI index gauging current sales conditions rose one
point in July to a level of 36 while the component measuring
sales expectations in the next six months increased three
points to 43. The gauge charting traffic of prospective
buyers posted a one-point decline to 20, the lowest reading
since end of 2022.
Looking at the three-month moving averages for regional
HMI scores, the Northeast increased two points to 45, the
Midwest held steady at 41, the South dropped three points
to 30 and the West declined three points to 25.
HMI tables can be found at nahb.org/hmi. More
information on housing statistics is also available at Housing
Economics PLUS.