By Don Magruder
The RoMac Building Supply Wood Commodity Index (Index) for December 2024 decreased by .6 percent to $458.11 per thousand after last month’s surge of 9.5 percent. The immediate excitement after the election is waning due to the realization that lower interest rates next year may not be in the cards in a housing market affected by tariffs and uncertainty. Commodity sales have become sluggish as activity continues to find consistency, and while many builders hope for a better 2025, interest rates along with costs in materials, labor, property, and insurance will weigh heavily on the direction.
The dimensional lumber portion of the Index dropped 3.8 percent to $480.36 per thousand with decreases across all species and sizes. Spruce Studs were positive 2.4 percent on one length to down 5.4 percent depending on size, but the direction was primarily down. Dimensional spruce dropped by .8 to 2.9 percent in a general retreat and 2x12 pine gave back $50 to $70 per thousand of 11.1 to 17.9 percent depending on length. 2x4 treated gave back 16.8 percent of a full-price retreat on narrow pine.
The sheathing portion of the Index fared better, increasing to $441.49 per thousand or a 2.1 percent increase or $9.09 per thousand. OSB sheathing increased $30 per thousand or about 8.4 percent on tighter supply, but CDX pine plywood gave back on average $45 per thousand or about 7.9 percent. OSB has been stubbornly high in the last few months as manufacturers have done a better job controlling supply.
This week the Federal Reserve will announce whether or not it will reduce interest rates further. Just a few months ago, it was believed December’s rate, as well as future ones, were a guarantee. However, that does not seem to be the case now. Higher interest rates, uncertainty, and tariffs are not good for housing and the next couple of months will really determine the direction for the year.
To you and your family, I hope you have a Merry Christmas and a prosperous New Year.
The RoMac Wood Commodity Index is a weighted lumber and sheathing composite based on usage in Central Florida. By using wholesale pricing, the Index is a good indicator of the pricing direction for the next 30 days.
Don Magruder is the Chief Executive Officer of RoMac Building Supply in Central Florida, he is a former president of the Southeast Mississippi Home Builders Association and a past Associate Vice President of the Home Builders Association of Lake County.
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