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 July 2020 to July 2021.
U.S. reconstruction costs rise to nearly double of the previous quarter
Total reconstruction costs, including materials and retail labor, rose 16.7% at the national level in the United States from July 2020 to July 2021. This growth was double compared to the 8.1% increase recorded during the April 2020 to April 2021 period. Lumber costs continued to be the main driver as prices for the material soared a historic 162.7%. This spike follows a previously recorded high increase three months ago, when lumber rose 84.7% from April 2020 to April 2021.
Demand for lumber is outpacing supply even as sawmills produce more wood after cutting output during the pandemic. The new home construction market is active, and the home improvement spree that took off during the past year continues unabated, leading to an ongoing need for materials and labor.
Reconstruction costs increased from July 2020 to July 2021 in all states. Idaho, Hawaii, and Maine had the biggest increases at 22.9%, 20.2%, and 19.3%, respectively. Florida had the lowest change at 12.8%.
Combined costs for material composites increased 30.4% from July 2020 to July 2021, also doubled compared with the 15.2% growth from April 2020 to April 2021. Prices were up for all categories. Lumber continued to take the lead at 162.7%, and drywall was a distant second with a 10.4% increase. Combined hourly retail labor rates increased 4.1% from July 2020 to July 2021, up slightly from the 3.8% increase recorded from April 2020 to April 2021. Labor costs for plumber increased the most among the trades, at 4.9%.
Canada cost increases mirror U.S. spike
In Canada, total reconstruction costs, including materials and labor, rose 16.9% from July 2020 to July 2021, also led by lumber. As in the United States, Canada’s overall price increases accelerated compared to the 7.7% recorded in the April 2020 to April 2021 period.
All provinces experienced cost increases. Newfoundland and Quebec had the highest growth rates at 19.3% and 19.1%, respectively. Alberta experienced the lowest increases at 14.3%.
Total material costs increased by 27% from July 2020 to July 2021. Lumber led the steep rise, with growth around 142.5%, nearly double compared to the 69.6% from April 2020 to April 2021. Hourly labor rates rose 4.3% overall, with the heating/AC mechanic category growing the most at 5%.
Read the latest 360Value Quarterly Cost Updates for more information on this quarter’s rises.