By Don Magruder
The June 2024 RoMac Building Supply Whole House Commodity Index decreased by .4 percent to $50,023 or a decline of $205 from the prior month which indicates these markets are searching for a bottom. Historically, the time period just before the July 4th holidays is subdued in price as summer vacations and the end of the school year become priorities for most families and builders. The push to complete projects by summer’s end along with the heart of hurricane season moving closer are catalysts to push markets higher.
Here are the notable price movers over the last 30 days.
Foundation wire mesh dropped 4.8 percent and rebar gave back 1.0 percent on better supply.
CDX plywood eased down 2.2 percent while OSB sheathing retreated 11.5 percent or about $1.60 per sheet. Little non-contract OSB wood is available, and this market could be poised for a quick turnaround if hurricane season lights up.
2x4 pine added 11.9 percent and 2x12 pine increased 6.1 percent, but 2x6 dropped 5.1 percent. Mixed market directions are a sign that the market is trying to settle on a bottom.
The dimensional spruce market was flat to down as studs were priced the same as last month, but 2x4 spruce dropped 3.8 percent while 2x6 spruce gave back 1.6 percent.
Because the price ran up in 2x4 pine, truss pricing added 3.5 percent for the month.
Treated 2x4s added 9.5 percent while 4x4 posts dropped 2.5 percent.
Windows dropped 6.1 percent and sliding glass doors eased down 3.7 percent as announced increases in price from prior months did not materialize.
Roof metal was up 8.0 percent on increased costs from the manufacturer.
Just like other parts of the economy, pressure is mounting on manufacturers to lower prices as consumers feel the impact of high prices. With housing starts subdued, this could be short-lived as any bump up in demand by year-end will overburden supply chains which will be pressed to handle housing starts greater than 1.6 million. Hurricane season is always a wildcard, and for the commodity markets, pricing appears to be close to the bottom. In short, I expect little to no price capitulation in the last half of 2024. Builders should prepare a just-in-case scenario with price escalations clauses for all project contracts.
Until next month, please have a safe and enjoyable July 4th!
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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