UPDATED: June 27, 2022
Prices on building materials have been falling since the tail end of May, which is highly unusual for two reasons. The first reason is that housing starts in the Northern part of the country should be in full swing right now, but the national average pace is down 3.5% over this time last year. The second is that inflation rose 8.6% in May, the highest rate since December 1981.
How These Factors Affect Building Supplies
What’s going on? If building materials prices are lower, why are housing starts falling? The truth is, they’re only falling in parts of the country. Here in the McCoy’s states, housing starts are still robust and builders, remodelers, and do-it-yourselfers alike can benefit from the materials that aren’t being used in the Northern parts of the country.
Why isn’t inflation causing building materials costs to rise? Last year, lumbermills experienced labor shortages and shipping disruptions. At the same time, suppliers of materials such as OSB, PVC, and resins used in everything from caulk to subfloor were hit with pandemic-related supply chain issues. This year, mills were able to ramp up to meet the usual spring and summer demand, which didn’t materialize as expected. They need to sell through this material, so prices are down while there’s a lot of product available. While we don’t have a crystal ball, we do think it’s unlikely this situation will continue for long.
Eventually, the mills will right-size their production. Additionally, inflation will likely impact the price of building materials if only because the cost to ship them will rise due to increased fuel costs. Sadly, those high fuel prices affect just about
everything, from the foods we eat to the materials we use to build.
What is the Status at McCoy’s?
Lumber costs are now 48% lower than they were 1 year ago, and panel costs are now 58% lower than a year ago. Here’s what we see now with some of the lumber and other building products in high demand.
- Framing Lumber:
2x4, 2x6, southern pine lumber, and western species lumber have bottomed this month after a long decline, and have begun to reverse to the upside. 2x8, 2x10, and 2x12 are still showing weakness, but are expected to hit bottom within the next couple of weeks.
- Treated Lumber:
Treated has become more readily available. Issues that were seen around chemical shortages have resolved.
- OSB and Plywood:
Builders are still seeing price reductions and greater availability on Southern Pine Sheathing plywood as well as OSB. Panels have not dropped as much as lumber simply because there are not as many producers.
- Radiant Barrier OSB:
There is an adequate supply of this product.
The supply remains tight due to the war in Ukraine, which is an important source of scrap metal.
Lead times are still extended, but we continue to work strategically with our key vendors to ensure access to supplies at our distribution centers and individual stores. Delays may occur, but we are placing orders now with longer lead times to accommodate our customer’s needs into the future. Prices on T-Posts continue to rise.
This entire category is still very tight. Lead times now extended to 8 to 12 weeks. However, we are continuing to work to maximize our direct allocations and work with key vendors to bring in additional products where possible.
- Engineered Subfloor:
Subflooring is now plentiful in our stores. Demand has weakened in other parts of the country, enabling McCoy’s to acquire more supplies.
- Windows, Doors, and Siding:
While supplies are opening up again, there are still longer-than-normal lead times on various types of windows and doors, and we continue to work with as many distributors as possible to gain access to supply. We strongly advise you contact your local store for lead times and detailed information on specific product lines or advice on alternatives with greater availability.
The Market Continues to Change
McCoy’s merchandising and pricing teams are committed to seeking creative ways to keep the materials you need for your jobs in stock and available at the best possible price. If you have any questions about the materials listed above or other products, please let us know by calling our hotline at 1-877-542-8986 or dropping by one of our stores. Let us know how we can help – we’re here to serve you.