February 2016 Whole House Commodity Index

February 2016 Whole House Graph


by Don Magruder, CEO of RoMac Building Supply

The Ro-Mac Lumber & Supply, Inc. Whole House Commodity Index (Index) declined in February by .3% to $29,462.33 as commodities and lowering fuel costs pressured most commodity pricing downward.  The vast majority of the items on the Index stayed flat and only five items eked out minor gains.  While some manufacturers and mills would like to increase pricing, most are having a hard time making anything stick.

The following are the notable movers since mid-January:

  • Rebar declined 2.2% as steel prices search for a firm bottom;
  • OSB sheathing declined 3.8% while CDX pine gave back 1.6% — demand and weather seem to be the biggest issues;
  • Dimension spruce declined 1.5% while 2×4 SPF studs added 2.1%;
  • Wide width pine was flat with narrower widths giving back 1.3% to 1.5%;
  • Architectural shingles retreated 2.8% as winter buys and the search for customers are creating deals; and
  • Doors were up 3.0% as manufacturers are trying to make a price increase stick.
  • Mid-February weather is very harsh in the northern regions of the country and pricing will remain flat to down as long as the inclement weather persists. As the spring thaw occurs, pricing should rise but continued concerns over the stock market, mortgage availability, and collapsing commodities could temper any increases. Builders should expect pricing to go up in the next month or so, and bids completed today may be too low in April. Plan accordingly and protect yourself.

The Ro-Mac Lumber & Supply, Inc. 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 Ro-Mac Lumber & Supply, Inc. in Central Florida. Go to romacfl.com to sign-up for the Index and other free market reports. To sign-up for this information via email, contact Rebecca Ballash at rebecca.ballash@romaclumber.com