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Mild reconstruction cost rise signals stabilizing market

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 October 2022 to October 2023.

Total reconstruction costs, including materials and retail labor, increased 5.1% from October 2022 to October 2023. This uptick follows the 4.3% increase from July 2022 to July 2023. Quarterly reconstruction costs increased by 1.7%, a slight shift from the 1.0% increase last quarter.

Every state sees increases in reconstruction costs

Residential costs in total increased 3.9% from October 2022 to October 2023 and 1.9% from July 2023 to October 2023. Utah had the largest increase at 7.3%, followed by Rhode Island (6.4%) and Montana (6.2%). Colorado’s rank changed most significantly, increasing from the 38th-highest cost increase in July 2023 to fifth highest in October 2023; costs were up 5.9% in the state.


Commercial costs in total increased 6.3% from October 2022 to October 2023 and 1.6% from July 2023 to October 2023. Utah had the largest increase at 10.8%, followed by Rhode Island at 9.8%. South Carolina had the largest shift in rank, down from the sixth-highest cost increase in July 2023 to 36th highest in October 2023, with prices rising 5.6% year-over-year.

Material and labor cost changes

Combined costs for material composites increased 0.4% from October 2022 to October 2023—up from the 1.6% decrease recorded from July 2022 to July 2023. Quarterly material costs increased 2.9% from July 2023 to October 2023. The lumber composite remains the only negative composite this quarter at 19.9%.

Meanwhile, concrete became the primary driver of materials, increasing 10.8%. Interior trim, which had increased the most for the past eight of nine quarters, followed at 7.8%.

Combined hourly retail labor costs increased 7.6% from October 2022 to October 2023, slightly below the 8.6% increase recorded in the prior two quarters. Labor costs over the past quarter, July 2023 to October 2023, increased 1.2%. Labor has remained on a steady incline for the past few years.

Following recent catastrophe events, including hurricanes and wildfires, reconstruction costs, specifically labor, have seen large increases, often highly localized. In Wailuku, Hawaii, an area impacted by wildfire, retail labor increased 6.3% from August to October 2023. Hawaii as a whole saw a 2.8% increase in the same period. On the hurricane front, labor costs in Spring Hill, Fla., increased 3.1% from September to October 2023, with costs in Florida as a whole rising 0.4%.

A future-focused look at trends

To help insurers navigate the increasing complexity in the market, Verisk has developed the Market Expectations Index for 360Value. The solution combines extensive data sets with analytic expertise and econometric methods.

The Market Expectations Index provides 3-, 6- and 12-month outlooks for residential and commercial structures. Calculations incorporate indicators for five key components that provide early signals for reconstruction costs: Lumber, roofing, concrete, drywall, and labor.

The market expectations for reconstruction costs, increased 1.3% from October 2023 to April 2024. The most significant indicator was drywall, increasing by 4.3%.

Read the latest 360Value Quarterly Reconstruction Cost Analysis for more information on this quarterly's rises.

Joel Teemant

Joel Teemant is product director, 360Value commercial lines, for Verisk. He can be reached at

Trish Hopkinson

Trish Hopkinson is Head of 360Value, for Verisk. You can reach Trish at

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 *Multiple additional factors may have also contributed to the increase, including generally high demand and U.S. tariffs on Canadian lumber, which were announced but not yet implemented at the time.

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