The cost of many common building materials spiked throughout 2021, putting reconstruction top of mind for insurers. CoreLogic tracks construction costs for commercial, residential, and agricultural construction of all types of good (labor and materials) throughout the United States and Canada. In the latest Quarterly Construction Insights Report, the company details its findings on trends relevant to insurers.

In June 2021, costs for lumber, an important component of construction, increased by 129% YoY and 152% YoY in the United States and Canada, respectively. This contributed to an increase in overall reconstruction cost.

Cost growth for copper wire significantly increased, with October 2021 YoY cost growth in the U.S. at 156%. The price of copper climbed significantly due to strong expectation of demand and supply constraints in conjunction with the continuing recovery of the U.S. economy and the new infrastructure bill. Fortunately, copper wire is a significantly lower portion of the overall building cost of a home than lumber.

Recent CoreLogic data from Residential Component Technology (RCT), their reconstruction cost estimating software, indicates that, since last quarter, total reconstruction cost has declined in many U.S. states and Canadian provinces. The national average was a decrease of 0.3% in the U.S. and 0.6% in Canada.

For a closer look at labor and material costs, in the context of larger reconstruction trends, please download the latest CoreLogic Quarterly Construction Insights Report here.