The Quarterly Construction Insights is a review of the state and health of the construction economy and other relevant statistics throughout the United States and Canada. This CoreLogic report covers matters such as material and labor costs for construction, growth rates of these costs, permit approvals for new construction, and construction jobs.
Why is construction important to begin with? We owe it to the construction economy for building the structures we need and love –our homes, workplaces, marketplaces, and shared community spaces.
Changes in material and labor costs can have a significant impact on property owners. When costs to rebuild increase, owners may find that they are underinsured in the event of damages from natural hazards or accidents. In December 2020, costs for lumber, a significant component of construction, have increased by 34% YOY and 40% YOY in the United States and Canada, respectively, as the COVID-19 pandemic has created supply constraints. Without reassessing a home’s reconstruction cost value (RCV), homeowners may find themselves underinsured after an adverse event. Higher construction costs also mean less new housing stock and jobs in construction, constraining the housing supply and increasing home prices. Home prices in Q4 2020 have seen a 3.5% increase for new housing and an 8.3% increase for existing.
Fortunately, authorizations for new housing permits were up 25% YOY in December, and in the last quarter 152,000 jobs were created in construction.