CoreLogic® curates this monthly bulletin of regional construction cost insights, which are reflected in the CoreLogic Claims Pricing database. We combine the current month’s pricing data with four common loss scenarios to create models illustrating market impacts across nine regions, which are compared month over month and year over year.
Our experts provide detailed analyses of changes and trends to provide additional insight into key drivers. View our Construction Database Pricing Methodology whitepaper to gain additional insight into how we populate cost values.
August Pricing Insights
In August, all loss scenario pricing stabilized with limited movement. Year over year, the fire/lightning scenario is down slightly; however, all other scenarios increased. Pricing rose 4.2% for the wind/hail scenario, 3.6% for the water (interior reconstruction) scenario, and 4% for the water mitigation scenario.
With storm and hurricane season in full swing, CoreLogic’s Pricing Analysis & Delivery Team will monitor post-CAT factors that may affect regional and national pricing. The pricing database is updated monthly, based on market surveys and valued feedback from customer focus groups.
During Q2 2023, the CoreLogic Pricing Analysis and Delivery Team completed a deep dive into the equipment rentals category. This comprehensive review resulted in significant rate adjustments to the entire equipment rentals category. The rate adjustments are commensurate with current market conditions and are reflected in the August 2023 Pricing Database.
Line Item Refresh
The CoreLogic Pricing Analysis & Delivery Team is excited to announce the commencement of a complete refresh of all line item actions within the Claims Construction Cost Database. This comprehensive review will include a realignment of each line item description and the detail(s) of their associated comments. Each category within the Claims Construction Cost Database will be standardized to provide users with a more consistent naming convention for product lookup and additional details for each line item action comment. These updates will promote efficient line item searches and clarity of choice.
The August 2023 Pricing Database release will initially address the entire paneling category. The realignment process will continue on a rolling monthly basis for all categories within the Claims Construction Cost Database. Roofing will be the second category scheduled for a refresh, with expected updates in the October 2023 Pricing Database release. The line item realignment project is planned to continue through 2024 when all categories will be complete.
Fire/Lightning (Large Loss) Insights: 12-Month Trend
In this category, large loss claims are modeled from a typical fire loss where all components of a home’s construction are affected. Losses typically exceed $100,000.
- Pricing increased for this scenario in April, May, and June of 2022, but the scenario remained relatively flat in subsequent months. Even with this recent stability, the scenario has not returned to Q1 2022 levels. Since August 2022, the average change has been less than 1% across the country, with the largest change occurring in the Southeast where there was 2% movement. Change is even less significant month over month, with no region varying more than +/-0.5%.
- Labor components stabilized in August, contributing to insignificant monthly changes overall for this loss scenario. Furthermore, all the labor categories remain elevated over Q1 and Q2 2022 pricing, contributing to the overall loss scenario remaining elevated for that period.
- This loss scenario includes a wide mix of material components, which counterbalance each other to result in month-over-month and year-over-year pricing stability. Categories where pricing is elevated over August 2022 include drywall, insulation, and windows. These are stabilized by categories that remain lower, such as cabinetry, framing, rough carpentry, and finish carpentry.
Wind/Hail (Exterior/Roof) Insights: 12-Month Trend
This category represents losses due to wind and/or hail weather activity. Restoration from this damage requires roof replacement, partial siding replacement, and accompanying accessories.
- There has been no increase in the wind and hail loss scenario this month. However, compared with August 2022, the pricing for this loss scenario is 4.2% higher.
- Steady labor rates for roofers, siding installers, and general laborers, as well as negligible increases (less than 0.5%) for roofing, siding, and window materials, have helped to stabilize the wind/hail loss scenario this month. Higher labor rates keep pricing elevated year over year, with rates increasing for roofers by 9.4%, siding installers by 4.6%, and window materials by 4.7%.
- CoreLogic Weather Verification Services monitored and recorded events with hail that was 1 inch or greater from July 3, 2023, through July 30, 2023. The impacts of these storms rippled across 37 states and 275 counties where estimated residential reconstruction costs were valued at $447 billion. The 1.4 million affected residences were primarily in Colorado, Michigan, Ohio, Indiana, Nebraska, Missouri, and Minnesota. The CoreLogic Pricing Data Team will assess post-loss amplification factors to determine if pricing adjustments are warranted.
Water (Interior Reconstruction) Insights: 12-Month Trend
Moderately complex losses are modeled for the interior water loss scenario using the bathroom as the origin of loss where a combination of replacement and repair of common household finishes is required.
- No significant monthly pricing changes have affected the water (interior reconstruction) scenario where all regions have seen less than +/-0.5% fluctuation. The year-over-year comparison is moving downward from an average of 8.6% in July 2023 to an average of 3.6% in August 2023, with the Northeast, Northwest, Southwest, and Southeast all leveling off at 3%.
- After labor rates for all categories increased last month, there was no change in August. Labor rates continue to keep this loss scenario pricing elevated year over year, as all labor categories are averaging 4.6% higher than this time last year.
- Minimal movement occurred in material pricing this month, with all categories averaging within a +/-1% variance across the regions. The exception is framing which decreased by an average of 2.4% this month and continues to drop well below August 2022 pricing of 38.6%.
Water Mitigation (Drying) Insights: 12-Month Trend
Typical drying costs for a residential structure include water extraction, wet material removal, and drying equipment use.
- In line with the other loss scenarios, water mitigation pricing has experienced very little change month over month, with a 0.1% decline on average. The water remediation technician rates are on par with the increase for labor in July of 2023, and this month-over-month flattening is consistent with the lack of monthly loss scenario movement.
- Compared to pricing in August 2022, water mitigation costs are 4% higher on average, with the Northwest and West Central rising to 5% and 6%, respectively. Analyzing the yearly comparison further, water mitigation labor rates are 4.9% higher on average than in August 2022 and the Northwest and West Central regions are trending higher at 5.8% and 6.5%, respectively.
About CoreLogic Data Research
CoreLogic develops this report using up-to-date materials and labor costs. CoreLogic’s team of analysts continuously researches hard costs such as labor, material, and equipment, including mark-ups. CoreLogic updates its database every month accordingly.
Our research also covers soft costs such as taxes and fringe benefits for reconstruction work performed as part of the insurance industry. CoreLogic monitors demographics and econometric statistics, government indicators, and localization requirements, including market trends from thousands of unique economies throughout the United States.
Other factors in this process include the following:
- Wage rates for more than 85 union and non-union trades
- Over 100,000 construction data points
- Productivity rates and crew sizes
- Building code requirements and localized cost variables
Additionally, we validate cost data by analyzing field inspection records, contractor estimates, phone surveys, and both partial and complete loss claim information.
Please complete the online form to provide feedback or request information on any items in our construction database. Please contact your sales executive or account manager for additional explanations or questions. A more detailed methodology explanation can be found in our Construction Database Pricing Methodology Whitepaper.
CoreLogic is a leading global property information, analytics and data-enabled solutions provider. The company’s combined data from public, contributory and proprietary sources includes over 4.5 billion records spanning more than 50 years, providing detailed coverage of property, mortgages and other encumbrances, consumer credit, tenancy, location, hazard risk and related performance information. The markets CoreLogic serves include real estate and mortgage finance, insurance, capital markets, and the public sector. CoreLogic delivers value to clients through unique data, analytics, workflow technology, advisory and managed services. Clients rely on CoreLogic to help identify and manage growth opportunities, improve performance and mitigate risk. Headquartered in Irvine, Calif., CoreLogic operates in North America, Western Europe and Asia Pacific. For more information, please visit stage.corelogic.com.
NOTE: The building material, labor, and other cost information in this bulletin is generated using research, sources, and methods current as of the date of this bulletin and is intended only to provide an estimated average of reconstruction cost trends in the specified general geographic regions of the United States. This cost information may vary further when adjusting claim values for specific property locations or specific business conditions.