Quarterly reconstruction costs stabilize as inflation recedes

January 30, 2024 / 2 min read

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 State from January 2023 to January 2024.

construction workers

Total reconstruction costs, including materials and retail labor, increased 4.1% from January 2023 to January 2024. This rise was slow at the onset of the year, jumped in June and August, then slowed again at the close of the year, rising only 0.4% in Q4 2023.

State changes for reconstruction costs

Residential and commercial reconstruction costs increased in all states.

Total residential costs increased 4.1% from January 2023 to January 2024. Colorado had the largest increase at 9.0%, followed by New Hampshire (7.8%) and Montana (6.0%). Florida’s rank changed most significantly, falling from the 14^th-highest cost increase in October 2023 to the 47^th-highest in January 2024; costs were up 3.0% in the state year-over-year.

residential-reconstruction-costs-q1-2024

Commercial costs, in total, increased 5.9% from January 2023 to January 2024 and 1.0% from October 2023 to January 2024. Colorado had the largest increase at 13.13% for the year, followed by New Hampshire (12.31%) and Massachusetts (9.9%). New York and Connecticut saw the most significant changes: New York rose from 41^st to 5^th, rising by 7.7%, while Connecticut rose from 44^th to 8^th, increasing by 7.2%.

commercial-reconstruction-costs-q1-2024

Material and labor cost changes

Combined costs for material composites increased 1.4% from January 2023 to January 2024—a major drop from their 7.8% increase the year before, but also a rally following their 0.3% loss from October 2022 to October 2023. Concrete composite saw the greatest increases, growing by 12.2%, while lumber saw a 12.8% drop in costs over the year.

Combined hourly retail labor costs increased by 6.2% from January 2023 to January 2024, a significant drop from the previous year’s 9.4% increase. Labor costs have risen for the last few years, but their growth rate appears to be slowing, as evidenced by the minor increase of 0.9% in Q4.