By Don Magruder
The RoMac Building Supply Whole House Commodity Index (Index) for March 2025 increased 1.5 percent to $52,123 as the very first impacts of increased tariffs started to permeate the building material markets. The March Index amount of $52,123 is the highest since September 2022, and it is 1.9 percent more than last March. The real concern for most dealers is the plethora of Notice to Increase letters that are flooding inboxes daily for increases in April based on new tariff costs. In many cases, due to the back-and-forth policies of the administration, the percentage of increases are vague or in a range form.
Two months ago, the main driver of the housing market was mortgage rates, and while that certainly is critical, the uncertainty of tariffs and now a potential recession are beginning to top builders' and suppliers’ concerns. There is little doubt that these tariffs will be inflationary unless these new tariffs push the housing market and economy into recession, which would be a worse-case scenario. In meetings with suppliers, mills, vendors, and builders, the common response to future pricing and sales growth usually ends up with an “I don’t know response.”
As it appears now, builders should expect higher pricing over the next couple of months unless there is a change in tariff stances quickly.
Here are the price movers on this month’s Index.
Foundation mesh increased 2.2 percent on steel price increases, and rebar increased 4.4 percent.
CDX pine plywood increased 5.8 percent on balanced supply and demand, while OSB sheathing retreated 3.9 percent.
2x4 narrow pine increased 5.9 percent on higher demand from treaters while 2x6 pine dropped 4.0 percent and 2x12 eased 2.0 percent on less demand.
The initial wave of Canadian tariffs and potential duties increased across the board. 2x4 dimensional spruce increased 14.8 percent and 2x6 spruce added 5.1 percent. 2x4- 92 5/8 studs jumped 9.2 percent.
Roof trusses added 5.9 percent to increased pine pricing.
Pocket frames added .7 percent on higher spruce cost.
4x4 treated added 5.9 percent on higher demand for the spring.
Exterior doors dropped 7.2 percent on lower slab pricing, while interior doors dropped 5.3 percent on more competition.
Vinyl soffit dropped 1.3 percent, and J channel added 3.0 percent on adjusted market pricing.
Understand, this is just the first impact of increases from tariffs, and builders should expect anything with steel, aluminum, spruce, or imported from Mexico, China, or Canada to be impacted. In short, 80 percent of what is used in a home.
Keep in mind that 30 percent of all the softwood used in America is imported from Canada, and the overseas markets are the primary suppliers of all specialty woods in the country. Ramping up wood production in America will be a long process that requires a lot of capital, labor, and time that many are unwilling or unable to invest. However, this could be said of most imported building materials.
Builders should have price escalation clauses in all contracts, keep close ties to suppliers, and be sure that pending contracts are solid with funding before starting the building process. Plus, keep in mind that the real tariff impacts have not hit yet.
It appears that as the weather warms and volume increases, along with mills and manufacturers figuring out the new tariff environment, this month could be the first of several increases. This last week, dealers have begun receiving notification letters of increases for everything from steel to aluminum connectors to drywall and shingles. March could usher in a significant wave of price increases that builders should be aware of as they bid on projects for the upcoming spring and summer building times.
As I talk to mills and manufacturers across the country, the most common response is “I don’t know.” It is very difficult to price any project with “I don’t know” pricing, and most home buyers and remodel customers are not open to adjusting contract pricing on upcoming projects. This is the time builders should have price escalation clause in all contracts because there is little chance that “I don’t know” pricing is going to settle any time soon.
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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