Verisk, a data analytics and risk assessment firm, has released a report highlighting reconstruction cost trends at the national and state level. The 10-year analysis (from Oct. 2014 to Oct. 2024) is derived from building cost research conducted by Verisk.
According to the report, national residential reconstruction costs, including materials and retail labor, increased 63.7% in the last 10 years.
- From Oct. 2014 to Oct. 2019, average residential reconstruction costs increased by 19.8% nationally and ranged between 12.6-26.9% at a state level with Washington, Nevada, Idaho, Oregon and Kentucky showing the largest increases.
- Residential reconstruction costs continued to rise throughout the next five-year period (Oct. 2019 – Oct. 2024), averaging 43.9% growth nationally and between 34-44.9% at a state level. During this period, Rhode Island, New Hampshire, Montana, Utah and Idaho showed the highest cost increase.
- Annual average residential reconstruction costs at the national level increased to 4% from Oct. 2014 to Oct. 2019, then jumped to 7.3% the following five-year period.
National commercial reconstruction costs also trended up, posting an average increase of 58.4% since Oct. 2014.
- From Oct. 2014 to Oct. 2019, average commercial reconstruction costs increased by 16.6% nationally and ranged between 11.6–25.0% at a state level with Washington, Nevada, Oregon, Idaho and Minnesota showing the largest state cost impact.
- This trend continued from Oct. 2019 to Oct. 2024, with commercial reconstruction costs averaging 41.8% growth nationally and between 28.7-45.5% at a state level. During this period, Rhode Island, Florida, New Hampshire, Utah and New Mexico showed the highest cost increase.
- Nationally, annual average commercial reconstruction costs increased to 3.3% from Oct. 2014 to Oct. 2019, then from that period to Oct. 2024 more than doubled to 7.2%.
Meanwhile, national commercial and residential lumber costs saw an average increase of 43.8% since Oct. 2014.
- National average lumber costs increased approximately 10 times from 3.9% in the first five-year period to 39.9% in the following five-year period.
- States such as Utah, Hawaii, Washington, Montana and New Mexico felt this impact the most over the past five years – with Montana, Washington and Utah costs growing by more than 50%. Meanwhile, Iowa, Indiana, Pennsylvania, Kansas and Alaska reported the lowest increase during the same time period.
“Over the past 10 years, we have seen a dramatic increase in reconstruction costs. In particular, the pandemic had a significant effect on building costs, reporting just over a 25% average increase for both commercial (24.3%) and residential (25.9%) costs from March 2020 through May 2023. This trend slowed after the pandemic but the impacts of inflation, labor market strains and supply chain delays still lingered–between April 2023 to October 2024 both commercial (12.4%) and residential costs (10.7%) continued to grow, averaging an 11.5% increase,” explained Trish Hopkinson, head of 360Value at Verisk.
According to Verisk’s Market Expectations Index, the industry can anticipate closer to pre-pandemic growth rates to continue from Jan. 2025 to July 2025 – by about 2% for residential and 2.2% for commercial.
To learn more about reconstruction costs at a granular level, visit Verisk’s 360Value Quarterly Reconstruction Costs hub.
