Reconstruction Cost Trends at National and State Levels
At national and state levels, total reconstruction costs, including materials and retail labor, increased sharply again, up 9.1% from
January 2020 to January 2021 as lumber costs posted a 54% jump. This continued a surge that began in the previous reporting period
with 9.2% growth from October 2019 to October 2020. But the fourth-quarter increase leveled off at 0.8%, following a
5.0% spike in the third quarter.
Reconstruction costs have increased in all states. Idaho, Hawaii, and Rhode Island had the biggest increases at 13.2%,
11.2%, and 10.8%, respectively. Washington, D.C., had the lowest change at 6.7%. Cost changes in New Mexico
were the most variable; the state had an increase of 34 rank positions.
Material Cost Analysis
Combined costs for material composites increased 14.2% from January 2020 to January 2021, compared with 14.5%
from October 2019 to October 2020. Costs were up for all categories. Lumber costs continued their extreme behavior
with a 54.0% surge as the market reflected ongoing high demand from increased building activity; supply shortages
driven by shutdowns earlier in the year related to the pandemic; and reduced production as the slower winter building
season starts. Carpet was a distant second with a 6.5% increase, and paint followed at 3.2%. The remaining categories
increased just 0.8% to 1.9%.
Labor Cost Analysis
Combined retail labor costs increased 7.9% from January 2020 to January 2021, slightly higher than the 7.3% rise
from October 2019 to October 2020. All common labor trades saw steady cost increases. Drywall installer/finisher
costs continued to increase the most, at 13.0%. Roofer cost increases trailed in second place by a large margin at
6.4%. Heating/AC mechanic costs continued to have the lowest total increase at 3.3%.