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Reconstruction costs rise slowly as lumber shows increasing volatility

Verisk recently released its latest 360Value® Reconstruction Cost Analysis, which offers an overview of current reconstruction cost trends at the national and state/provincial levels for the United States and Canada from October 2020 to October 2021.

U.S. reconstruction cost increases beginning to moderate compared to previous months

Total reconstruction costs, including materials and retail labor, rose 5.8 percent at the national level in the United States from October 2020 to October 2021. This change reflects a decline in the growth rate from the 16.7 percent spike recorded in the year-over-year period ended in July 2021. While lumber prices began their historic rise a year ago, reaching a peak year-over-year increase of 162.7 percent in July 2021, the material category rose only 4.1 percent between October 2020 and October 2021.

Though lumber prices are rising less dramatically, they are still well above pre-pandemic levels as demand remains high for the material due to continuing strength in the homebuilding and renovation market.

Verisk Reconstruction Cost Analysis

Reconstruction costs increased from October 2020 to October 2021 in all states. New York, Wisconsin, and Louisiana had the biggest increases year-over-year at 9.7 percent, 9.5 percent, and 7.6 percent, respectively. Wyoming had the lowest change at 3.4 percent.

Combined costs for material composites increased 5.4 percent from October 2020 to October 2021, falling significantly from the July 2020 to July 2021 period, when material costs rose 30.4 percent. Lumber, which has been the driver behind rising material costs since its steep climb back in the fall of 2020, rose just 4.1 percent from October 2020 to October 2021.

While lumber supply seems to be loosening, materials shortages of lumber-derived finished goods are continuing in some categories. The category with the most significant spike this period was interior trim composite, which saw prices rise 26.4 percent year-over-year, a larger bump from July when it rose 7.8 percent. A major factor in that category is the rising price of interior wood doors and associated materials, such as jambs.

Combined hourly retail labor rates increased 4.3 percent from October 2020 to October 2021, up slightly from the 4.1 percent increase recorded from July 2020 to July 2021. Plumber costs increased the most among the trades, at 5.7 percent.

Canada reconstruction costs increase at half the pace

In Canada, total reconstruction costs, including materials and labor, rose 8.6 percent from October 2020 to October 2021, with increases still mostly led by lumber. Although Canada’s rate of increase was well below the 16.9 percent recorded between July 2020 and July 2021.

Verisk Reconstruction Cost Analysis

All provinces experienced cost increases. New Brunswick and Newfoundland had the highest growth rates at 10.5 percent and 10.1 percent, respectively. Manitoba experienced the lowest increase at 6.8 percent.

Total material costs increased by 10.9 percent from October 2020 to October 2021. Lumber continued to be the category experiencing the largest gain, with a 35.9 percent increase. Though that figure is significantly less than the 142.5 percent increase recorded between July 2020 and July 2021. Hourly labor rates rose 4.5 percent, with the heating/AC mechanic category growing the most at 4.9 percent.

Read the latest 360Value® Reconstruction Cost Analysis for more information on this quarter’s rises.

Trish Hopkinson

Trish Hopkinson is product director, 360Value personal lines, for Verisk. You can reach Trish at

Joel Teemant

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

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