
By Don Magruder
The RoMac Building Supply Whole House Commodity Index for mid-May 2023 was flat, registering a less than .1 percent decline to $49,743, and this is the second straight month of little movement. The spring banking crisis, interest rates, and uncertainty regarding the nation’s debt ceiling limit have builders and developers slow-playing projects to ensure they are not caught financially exposed. Most builders in Central Florida are not seeing cancellations and over the last few weeks enthusiasm to go forward with projects seems to be garnering more momentum, but there is general cautiousness in the markets. Demand overall remains strong as Florida’s population continues to grow and housing inventories remain low due to homeowners being house-locked because of higher interest rates and appreciated home pricing.
Here are the notable price movers over the last month.
Bagged stucco mortar was up 5.7 percent.
Dimensional spruce was down 3.5 to 9.9 percent while dimensional narrow-width pine was flat to down 6.7 percent, but wide-width 2x12 added 10.7 percent.
Spruce 2x4- 92 5/8 studs were up 1.7 percent.
CDX pine plywood was flat again this month while OSB sheathing continues to add in cost increasing by 12.4 percent.
4x4-8 treated post declined 25.1 percent on softening spring demand.
Engineered I-Joist were down 5.7 percent on lower cost and better supply.
Metal Fasteners had minimal declines in the 7 percent range and some minimal retreats in metal hangers. Supply is getting closer to normal.
The items declining in price had an offset in the Index, and the general mood in pricing was blah.
Recent housing reports suggest that the markets are improving and resolving the nation’s debt limit issue and the banking crisis which could produce a nice summer bump in housing. Inventories nationally remain low and pricing on homes continues to increase, and this tells me the housing markets just need some calming. Don’t be surprised to see these markets improve a little next month if these overarching financial market issues are resolved.
Builders simply need a sign from the government that it is safe to build and that interest rates are stable.
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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