March 2021 Whole House Commodity Index

WHCI Graph

The RoMac Building Supply Whole House Commodity Index (Index) for March 2021 surged to another record high as pricing continues to escalate in most building material sectors.  The Index jumped 4.8 percent to $49,697 from the prior month, and since the pandemic began in mid-March 2020, the Index has increased an unimaginable 45.8 percent going from $34,077 to $46,697.  Builders that have been reluctant to increase pricing over the last year have taken a beating because these numbers do not reflect the increased costs in labor nor the loss money due to significant lead times.

At this moment, the markets are signaling no letup in price increases and in fact, supply and pricing could become much worse as the winter thaw continues and the pandemic resolves itself through more vaccinations.  Plus, a $1.9 trillion stimulus package just approved by the Biden administration, with a rescue package for housing, will heat the markets more.  Builders must not be resistant to price increases and should actually strive to get ahead of them.  Higher pricing may be here for some time.

The following are the price movers on the Index for the last 30 days.    

  • Rolled foundation poly jumped 12.3 percent on short supply of raw products.
  • Foundation wire mesh was up 9.5 percent on higher steel pricing while rod chairs are up 15.4 percent, if they can be found.
  • 19/32” CDX pine plywood jumped 21.7 percent as new code requirements in Florida are exacerbating an already bad marketplace. That is more than $7 per sheet. The selling price is now over $40 in most locations.
  • OSB sheathing is up 6.1 percent or almost $2.50 per sheet.  7/16” is selling over $30 per sheet at many sites.  Plus, many mills are off the market selling products because of resin issues.
  • 2×4 pine was up 2.8 percent, 2×6 pine lost 2.1 percent, but 2×12 pine soared 11.6 percent on tight supply. Treated pine followed suit.
  • Spruce studs added 9.0 percent on tight supply for quality and 2×4 spruce dimensional only increased .5 percent while 2×6 was stronger adding 3.9 percent.
  • Roof trusses were up 6.1 percent on increased pine and metal plating costs as well as continued labor pressures.  Demand is outstripping production capabilities in a COVID-19 environment.
  • Rolled fiberglass insulation increased 9.7 percent on a huge annual increase plus supply is getting very tight.
  • The laminate Glulam beam for our home added 21.2 percent as engineered wood products soar on high resin costs.
  • Vinyl siding was up again 10.0 percent on higher raw costs.
  • The sliding glass doors increased 24.3 percent on a change due to unavailability of the prior door. This is another issue causing pain for builders as many are forced to change products as manufacturers limit offerings due to production issues.
  • Colonial casing added 29.6 percent and base added 8.8 percent as molding hits real supply issues and cost increases.

If you read the 12 items from above closely, you will come away with one conclusion – the supply markets are a mess.  With continued labor issues related to COVID-19, a supply chain devastated by bad trade policies over the last few years, and a demand equation that is redirecting supply to other parts of the world; and throw in an economy that is juiced with stimulus and a population that is ready to start living again with a lot of cash in the bank, you have a perfect storm for high pricing.

I encourage builders and homeowners to be mindful this could get worse later in the year.

It is imperative that you have a Price Adjustment Clause in your contracts to protect yourself regarding pricing. RoMac Building Supply offers, for free, a Price Adjustment Clause for Contracts, which is linked to this Index. It can be obtained by contacting Rebecca Ballash through our Contact Us page.

Finally, as the winter thaw occurs and the pandemic resolves, the markets could worsen in the months of March and April, setting more records.

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. Go to romacfl.com to sign-up for the Index and other free market reports. For great videos and Don’s weekly column, go to the Around The House site to subscribe to our YouTube channel and weekly updates.