Reconstruction cost dips signal increased market stabilization

April 12, 2023 / 2 min read

Verisk recently released its latest 360Value^® Quarterly Reconstruction Cost Analysis, which offers an overview of current reconstruction cost trends at the national and state levels for the United States from April 2022 to April 2023.

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Reconstruction cost increases have started to slow down and steady, showing a decrease for the last 12 months.

Total reconstruction costs, including materials and retail labor, increased 3.1% from April 2022 to April 2023. This drop follows the 6.8% increase from January 2022 to January 2023. Cost increases continue to slow down and steady.

State changes for reconstruction costs

Residential costs in total increased 1.1% from April 2022 to April 2023 and 0.8% from January 2023 to April 2023. Florida had the largest increase at 6.8%, followed by Utah (4.2%) and New Mexico (4.0%). California’s rank changed most significantly, rising from the 33^rd-highest cost increase in January 2023 to the seventh-highest in April 2023; costs were up 2.4% in the state.

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Commercial costs in total increased 5.1% from April 2022 to April 2023 and 2.0% from January 2023 to April 2023. Every state saw higher commercial reconstruction costs. Utah had the largest increase at 9.6%, followed by Florida (9.0%) and New Mexico (7.7%).

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Slowing down and steadying

Reconstruction cost increases have started to slow down and steady, showing a decrease for the last 12 months. Lumber continued to serve as the only compositive in the negative this quarter, at 37.3%.

Interior trim increased the most, rising 18.9% This is led by the costs of interior doors and crown molding. Drywall and roofing composites followed behind at 13.7% and 12.0%, respectively.

Labor costs have remained on a steady incline for the last few years. Concrete mason was a key driver for labor, increasing at 11.4%, the highest of the labor categories.

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Tracing Canada costs

Verisk acquired Opta, Canada’s leading provider of property intelligence and innovative technology solutions. Opta is monitoring reconstruction cost changes for the Canadian market.