Economic

Blue Tarp Financial’s Building Supply Index, which measures contractor sentiment, reached an all-time high in the third quarter of 2018.  On the surface, this appears to be good news. 

BMC Stock Holdings, Inc., one of the leading providers of diversified building products, services and innovative solutions in the U.S. residential construction market, today announced its financial results for the third quarter ended September 30, 2018.

Builders FirstSource (BFS), the industry’s largest supplier of building products, saw another significant increase in net sales in the third quarter ending September 30, 2018. 

Every year since 1960, when Congress and President John F. Kennedy designated every third week in October as National Forest Product Week, Americans recognize the economic value and numerous products and recreational benefits that stem from the forests in the U.S.

The top ten most read SBC Industry News Headlines of Q3 2018 are below:

The cost index for ‘goods inputs into construction’ is now racing ahead at its fastest rate since September 2008’s +12.4%. But that elevated rate of +12.4% a decade ago resulted from an artificial boom in homebuilding that was fueled by faulty subprime mortgage lending.

Economist John Burns of John Burns Real Estate Consulting, recently shared his predictions on a rise in household formation between 2016 to 2025 that, according to his analysis, will require 1.25 million housing units to be constructed per year to accommodate it.

Although builders are slowly catching up with demand, they continue to lag behind, yet are making record profits. Presumably component manufacturers should be too.

It is becoming easier to kick start this whole home construction process and obtain AD&C loans. This upward trend in lending provides a meaningful window into future housing start trends, and thus, demand for structural building components.

Recent earnings reports from public builders like D.R. Horton, Meritage and Tripointe (as examples) make it clear homebuilders are not struggling to make a profit even as labor and building material prices have risen sharply.