by Don Magruder, CEO of Ro-Mac Lumber & Supply, Inc.
The Ro-Mac Lumber & Supply, Inc. Whole House Commodity Index (Index) for January 2018 reversed two months of decreased pricing by adding 1.4 percent to $33,109. This sets a tone that the new year could be fraught with price increases throughout the supply chain. Many in the industry are optimistic that the housing recovery in the United States, fueled by lower tax rates, will continue and should begin in earnest once the winter weather eases.
Overall commodity and building material pricing for the fourth quarter was propped up by hurricane repairs from major storms in both Florida and Texas, as well as the Canadian-United States Softwood Agreement trade dispute. Both appear to have a much lesser influence going into 2018, as hurricane repairs are waning and the United States finalized its duties on Canadian lumber earlier in the month.
The primary price movers for the mid-January Index update were the following:
Freight issues will be a huge influence on pricing this year as drivers’ wages, driving regulations, and fuel prices are poised to increase costs and limit further availability. Expect lead time to extend somewhat as manufacturers may struggle to find drivers for loads.
2018 has the makings for a strong year in housing if the chaos in Washington D.C. settles down and an unexpected crisis is not created. The fundamental looks okay except for the affordability issue, which grows worse daily. Ultimately, the lack of affordable housing could be the extinguisher of any long-term growth in the housing market.
Builders should beware pricing projects for March and April with January’s pricing as warm weather and new tax cuts could make the markets volatile. Now is the time to install price adjustment clauses in your contract. If you would like one based on this Index please email Rebecca Ballash at
for a copy.
Until next month, stay warm and get ready for a busy year.
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 www.romaclumber.com to sign-up for the Index and other free market reports. To sign-up for this information via email, contact Rebecca Ballash at