By Don Magruder
The RoMac Building Supply Whole House Commodity Index (Index) for September 2024 increased 1.5 percent to $50,363 from last month, and compared to last year, the Index is down 1.7 percent. The big news thus far is hurricane season has been very quiet, and unless something unexpected happens in the next few weeks, we just might escape it with little impact. That would be great news.
Everyone is eying what the Federal Reserve will do in the coming weeks. A quarter-point decrease in interest rates would be a start, but a half-point would be a boost for the housing market. Either way, it would signal a move to better times possibly for housing.
This is the third month in a row the Index has increased, and the continued mill curtailments and closures are certainly having an impact since demand remains unimpressive. Builders should be mindful that a quick change in housing sentiments could bring upward volatility to markets. Mills and dealers are expecting improved conditions as we approach 2025.
Here are the significant price movers over the last 30 days.
Foundation mesh dropped 1.7 percent, and rebar gave back 2.4 percent on weaker demand.
CDX pine plywood continues to escalate in price with a 13.8 percent increase this month while OSB sheathing dropped a meager .7 percent. This spread may pressure OSB prices up soon.
2x6 spruce was up 9.0 percent on tight supply while 2x4 spruce added 4.2 percent and studs increased 3.2 percent.
Pine was mixed in pricing. 2x4 pine added .9 percent while 2x12 pine increased 6.0 percent. Oddly, 2x6 pine gave back 4.2 percent.
Truss prices increased 4.0 percent on multiple months of increased pricing for pine, especially truss grade pine.
Roofing shingles added 2.5 percent on manufacture increases which are struggling to stick in this non-hurricane season.
The remaining items on the Index were stable.
Over the next few weeks, the Federal Reserve and Tropical Forecast will determine where these markets go. There is a general sense the low prices of the summer are behind the market, and the housing market should be poised for continuous improvement, especially once the Presidential elections are behind the country in November.
Keep an eye on the markets and let’s watch some football.
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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