Verisk recently released its latest 360Value® Quarterly Cost Updates, which offers an overview of current reconstruction cost trends at the national and state/provincial levels for the United States and Canada from April 2020 to April 2021.
U.S. reconstruction costs rise again
Total reconstruction costs, including materials and retail labor, rose 8.12% at the national level in the United States from April 2020 to April 2021. The period’s growth was slightly less heated than the 9.1% increase seen from January 2020 to January 2021. Lumber costs soared a historic 84.71%, three months after notching a 54% increase from January 2020 to January 2021.
Lower interest rates combined with a pandemic-fueled home-buying surge have contributed to increased building activity as homeowners spruce up their properties, leading to rising demand for materials and labor.
Reconstruction costs increased in all states. Idaho, Hawaii, and New Mexico had the most significant increases at 11.93%, 11.06%, and 10.1%. California had the lowest change at 5.86%.
Materials costs were up 15.2% with rises in all categories, with lumber leading, followed by carpet at a distant second with a 7.63% increase. Hourly labor rates rose 3.8%, about half the growth of the prior period, with electrician costs up the most among the trades with a 3.93% jump.
Canada costs climb at a lower rate
In Canada, total costs increased 7.65% from April 2020 to April 2021, led by lumber costs. Just as in the United States, the most recent period’s growth slowed from January 2020 to January 2021, which notched a 7.9% increase. During the first quarter of 2021 (January through March), reconstruction costs grew 0.94%.
All provinces experienced cost increases. Newfoundland and Quebec had the highest growth rates at 8.94% and 8.92%, respectively, while Saskatchewan had the lowest increase at 6.16%.
Lumber prices rose 69.51%, which was even greater than the increase of 42.7% from January 2020 to January 2021. Carpet prices were No. 2, with a 7.26% rise. Hourly labor rates rose 3.7% overall, with heating/air-conditioning mechanics seeing the biggest wage growth at 4.57%.
Read the full 360Value® Quarterly Cost Updates.