December 2024 Whole House Commodity Report

By Don Magruder

The RoMac Building Supply Whole House Commodity Index (Index) for December 2024 decreased by 4 percent to $51,222 as the housing market continues to remain unimpressive in activity. The excitement of interest rate drops of a month ago is waning as prospective homeowners and builders are beginning to grapple with the realization that future interest rate decline by the Federal Reserve could be limited due to economic uncertainty and the renewed embers of inflation firing up. The supply chain is gripped with uncertainty as no one can figure out how serious or real new tariffs will be in the upcoming year.  

Since last December, this Index has increased by 2.1 percent, which is close to the Federal Reserve target, but the problem for builders is wages for construction workers.  According to the United State Department of Labor Bureau of Statistics, in September Residential Construction Labor was up 9.9 percent year over year- that is a huge increase and demonstrates an insufficient amount of skilled labor in the country.  These same types of labor pressures are being felt by manufacturers, suppliers, and installers in the housing industry, but pricing is up 2.1 percent.  My view is that the housing supply sector will see a plethora of increases after the first of the year due to higher wages and fixed-cost inflation along with the burden of anticipated new tariffs. Builders need to be mindful and protect themselves with price escalation clauses in their contracts. 

The markets are struggling with the demand equation because housing-starts remain unimpressive, but one other point that must be noted is the size of the starts.  Due to much higher pricing, the square footage of homes is being reduced which directly impacts the number of products being sold.  

Slower demand in mid-December has subdued the market in some areas, but this could be the calm before the storm. 

Here are the notable movers in this month’s Index.

1. Foundation wire mesh increased by 2.2 percent on supply issues. 

2. CDX plywood was down 7.5 percent on lighter demand, but OSB sheathings were up 5.1 percent on tighter availability. 

3. Spruce was up marginally.  2x4 dimension added 1.5 percent while 2x6 went up 3.9 percent.  2x4- 92 5/8” studs were flat.  

4. Dimensional pine was down on lackluster demand.  2x4 pine dropped 21.5 percent, 2x6 pine posted a 10.5 percent decline, and 2x12 pine was off by 5.3 percent.  

5. Treated 2x4 pine was down 18.2 percent on lower pine pricing.

Builders should be worried about cost inflation in 2025 as no one can truly predict the impact of tariffs on the industry. One point that cannot be ignored is that the housing industry relies heavily on imports of raw materials and so do the equipment used in the industry.  

I want to thank you for reading the RoMac Building Supply Whole House Commodity Index, and I would like to wish you and your family a joyous and blessed Christmas and Happy New Year.  Here’s to a great 2025! 

The RoMac Building Supply Whole House Commodity Index is based on wholesale costs of the base components to build a 2,200-square-foot wood frame home with a concrete stem wall in Central Florida. The Index includes foundation, metal, concrete, block, stucco, cement, wood framing, siding, sheathings, trusses, roofing, drywall, insulation, windows, doors, trim, garage doors, and most building hardware. It does not include décor, electrical, plumbing, mechanical, landscaping, or labor. Because the Index uses current wholesale costs, this should be a strong indicator of the direction of building prices for the next 30-45 days.

Don Magruder is the Chief Executive Officer of RoMac Building Supply in Central Florida.

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