QUARTERLY CONSTRUCTION INSIGHTS - Q3 2021 - CORELOGIC
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Quarterly Construction Insights
Q3 2021
* The data for this Q3 report is a review of Q2 2021. This naming convention has recently been
updated to match the quarter of release.
Proprietary | © 2021 CoreLogic, Inc. All rights reserved.
CORELOGIC and the CoreLogic logo are trademarks of
CoreLogic, Inc. and/or its subsidiaries.
Summary of Q2 2021
June Permit Authorizations
Up 25% YoY, Lumber Costs Up
129% YoY
▪ Authorizations for new housing permits
continue to rise and increased 25% YoY in June.
▪ Costs for plywood and lumber continued to
have over 100% YoY increases, while Romex wire
and oak followed the trend.
▪ Labor costs continue to grow faster in the U.S.
than in Canada, with many key construction
labor costs growing by over 5% YoY.
▪ Confidence in commercial construction is
improving, though still much lower than before
pandemic.
Proprietary | © 2021 CoreLogic, Inc. All rights reserved.
CORELOGIC and the CoreLogic logo are trademarks of
CoreLogic, Inc. and/or its subsidiaries. 2
The Big Picture
Lumber costs continue to rise at unprecedented levels, but then began to level out. Why?
In June 2021, costs for lumber, an important component of construction, increased by 129% YoY
and 152% YoY in the United States and Canada, respectively.
After many sawmills shut down due to the COVID-19 pandemic, production of lumber declined.
However, unexpectedly, a homebuilding boom was underway, driven partly by low interest rates
and partly by pandemic lockdown restrictions. Residential and commercial building owners
began to remodel to adapt to the new circumstances. With a steep increase in demand for
lumber and low supply, sawmills struggled and are still struggling to catch up. But very recently,
as production of lumber met high demand, the growth of lumber prices began to slow, as
indicated by sales prices at retailers.
With the rapid increase in building costs continuing to have a ripple effect, U.S. new and existing
home prices in Q2 2021 have seen a YoY 14% and 17% increase, respectively. It is important to note
that unforeseen events can cause spikes in lumber costs. With respect to current building costs,
insurance carriers, contractors and homeowners should be aware of the potential downstream
implications of cost spikes on insuring to value (ITV). These fluctuations could have regional
variations in impact.
Proprietary | © 2021 CoreLogic, Inc. All rights reserved. CORELOGIC and the CoreLogic logo are trademarks of
CoreLogic, Inc. and/or its subsidiaries. 3
U.S. Changes in Material Cost, YoY
Costs for many individual materials 180%
have continued to be significantly 160%
140% Material June
higher than at the same time last year. 2021 YoY
120% Change
Costs for plywood and lumber in June
100%
2021 were more than double what they ½” +165%
80% Plywood
were in June 2020, and Romex wire and
60% 2x4 +129%
oak followed the trend. Lumber
40%
20% 2x10 +104%
Different materials experience different Lumber
0%
rate hikes for various reasons. Products Romex +66%
-20% Wire
such as plywood or plastics use
1x4 Oak +34%
additional processes, meaning that
glues and resins contribute to their Concrete Block Clay Brick 1/2" Drywall Structural Steel
Steel Deck Asphalt Shingles 25yr, 3-tab 1/2" Rebar 1" Galvanized Pipe
cost. For materials with additional Romex Wire 1/2" Plywood 2x4 Lumber R-13 Fiber Batt Insulation
processes, cost changes are more Poly Rigid Insulation 1/4" Glass Plate Exterior Paint 1/2" Copper Pipe
1/2" PVC Pipe 3/4" Crushed Stone Aluminum Conduit 1x4 Oak
gradual. But for solid soft woods such 4" Ceramic Wall Tile Steel Stud Ready Mix Asphalt Felt 15#
as lumber or oak, cost changes are Door- Interior HC slab Dumpsters. Carpet- Nylon Loop 1/2" PEX Pipe
more rapid. 1" Black Fire-Sprinkler pipe 2x10 Lumber Door Casing Asphalt Dimensional Shingles
1/2" Copper Pipe Type "L"
Source: CoreLogic
Proprietary | © 2021 CoreLogic, Inc. All rights reserved. CORELOGIC and the CoreLogic logo are trademarks of
CoreLogic, Inc. and/or its subsidiaries. 4
Canada Changes in Material Cost, YoY
160%
Costs for many individual materials
140%
have continued to be significantly 120% Material June
higher than at the same time last year. 100% 2021 YoY
Costs for plywood and lumber in June 80% Change
2021 were more than double what they 60% 2x4 +152%
Lumber
were in June 2020, and Romex wire and 40%
20% ½” +121%
oak followed the trend. Plywood
0%
2x10 +102%
-20%
Different materials experience different Lumber
rate hikes for various reasons. Products Romex +53%
Wire
such as plywood or plastics use
Concrete Block Clay Brick 1/2" Drywall
Structural Steel Steel Deck Asphalt Shingles 25yr, 3-tab
1x4 Oak +14%
additional processes, meaning that 1/2" Rebar 1" Galvanized Pipe Romex Wire
glues and resins contribute to their 1/2" Plywood 2x4 Lumber R-13 Fiber Batt Insulation
cost. For materials with additional Poly Rigid Insulation 1/4" Glass Plate Exterior Paint
1/2" Copper Pipe 1/2" PVC Pipe 3/4" Crushed Stone
processes, cost changes are more
Aluminum Conduit 1x4 Oak 4" Ceramic Wall Tile
gradual. But for solid soft woods such Steel Stud Ready Mix Asphalt Felt 15#
as lumber or oak, cost changes are Door- Interior HC slab Dumpsters. Carpet- Nylon Loop
more rapid. 1/2" PEX Pipe 1" Black Fire-Sprinkler pipe 2x10 Lumber
Door Casing Asphalt Dimensional Shingles 1/2" Copper Pipe Type "L"
Source: CoreLogic
Proprietary | © 2021 CoreLogic, Inc. All rights reserved. CORELOGIC and the CoreLogic logo are trademarks of
CoreLogic, Inc. and/or its subsidiaries. 5
Labor Costs in the U.S. and Canada Compared
With a continuing shortage of workers for construction, companies are needing to pay higher rates for skilled labor.
From June 2020 to June 2021, residential and commercial labor costs in the United States grew significantly with cost
growth as high as 9% for teamsters. Labor costs in Canada continue to remain relatively more stable, with cost growth
highest for bricklayers at 4%.
Labor Cost Change by Occupation
(percent change, June 2020 to June 2021)
10.0%
9.0%
8.0%
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
YoY U.S. YoY CAN
Source: CoreLogic
Proprietary | © 2021 CoreLogic, Inc. All rights reserved. CORELOGIC and the CoreLogic logo are trademarks of
CoreLogic, Inc. and/or its subsidiaries. 6
Q1 2021 to Q2 2021 Change in Residential Reconstruction Cost – United States
Changes in costs for materials impacts the final residential reconstruction cost of a property. Over a quarter,
costs have increased anywhere from 0.7% to 3.3% in each state. The national average was a change of 1.4%.
Most Significant Cost Increases
State Change
MaineMost Significant Cost Increases
+3.3%
South Dakota +2.6%
Alabama +2.5%
Least Cost Growth
State Change
New Jersey +0.7%
California +0.7%
New York +0.7%
Source: CoreLogic RCT
Proprietary | © 2021 CoreLogic, Inc. All rights reserved. CORELOGIC and the CoreLogic logo are trademarks of
CoreLogic, Inc. and/or its subsidiaries. 7
Q1 2021 to Q2 2021 Change in Residential Reconstruction Cost – Canada
Changes in costs for materials impacts the final residential reconstruction cost of a property. Over a quarter,
costs have increased anywhere from 0.2% to 1.4% in every province. The national average was a change of 0.8%.
Most Significant Cost Increases
State Change
New Brunswick +1.4%
Most Significant Cost Increases
Yukon Territory +1.3%
Northwest Territories +1.2%
Least Cost Growth
State Change
Nova Scotia +0.2%
Quebec +0.3%
Newfoundland +0.5%
Source: CoreLogic RCT
Proprietary | © 2021 CoreLogic, Inc. All rights reserved. CORELOGIC and the CoreLogic logo are trademarks of
CoreLogic, Inc. and/or its subsidiaries. 8ECONOMIC INDICATORS
U.S. Economic
Indicators
Q1 2021 Q2 2021
Housing Starts* 1,599 1,568
Building Permits* 1,788 1,671
The U.S. economy has seen significant Home Sales* 7,200 6,558
disruptions over the course of the New 826 728
Existing 6,303 5,830
pandemic. Housing prices have
skyrocketed, with change in home Unemployment 6.2% 5.9%
price from Q2 2020 to Q2 2021 being
Consumer Confidence 96.3 121.6
17.2% for existing stock and 13.8% for
new stock. Though unemployment
30-Year Fixed Mortgage Rate 2.9% 3.0%
has declined and consumer
Q2 2020 Q2 2021
confidence has increased, housing
starts, building permits and home Home Price YOY Change
New (%) 2.7% 13.8%
sales are lower in Q2 2021 than in Q1 Existing (%) 4.5% 17.2%
2021.
Data may be revised
*in 1,000s
Sources: U.S. Bureau of the Census, National Association of Realtors, U.S. Bureau of Labor
Statistics, The Conference Board, Freddie Mac, CoreLogic
Proprietary | © 2021 CoreLogic, Inc. All rights reserved. CORELOGIC and the CoreLogic logo are trademarks of
CoreLogic, Inc. and/or its subsidiaries. 9Changes in Permit Authorizations
Construction permits are an indicator of anticipation. Because permits are required before construction can begin, they
may be an indicator that builders are moving forward with projects. U.S. permit authorizations in June 2021 were at 25%
total growth when compared to June 2020. All four regions have seen an increase in permit authorizations with the South
and West in the lead with 31% and 27% growth, respectively. All unit types have seen an increase between 19% and 25%, with
no particular focus on one type over the others.
West Region
South Region
Midwest Region
Northeast Region
0% 10% 20% 30% 40%
Units Jun-20 Jun-21 % Change
1 84,270 105,122 25%
2 2,324 2,770 19%
3 or 4 1,569 1,895 21%
5+ 35,836 44,713 25%
Total 123,999 154,500 25%
Authorized Building Permits
(Units % Change) 6/2020 – 6/2021
Source: U.S. Census Bureau
Proprietary | © 2021 CoreLogic, Inc. All rights reserved. CORELOGIC and the CoreLogic logo are trademarks of
CoreLogic, Inc. and/or its subsidiaries. 10Construction Job Growth in the U.S.
Construction employment totaled 7,410,000 in June, down 38,000 from March. Employment in construction was
up by 239,000 jobs since June 2020.
Total U.S. Construction Employment in June 2021 Highest Annual GROWTH Largest Annual DECLINE
7,410,000
Massachusetts Wyoming
25% -8%
38,000 New York
22%
Colorado
-2%
qtr/qtr
239,000
Michigan Alabama
21% -2%
yr/yr
Source: U.S. Bureau of Labor Statistics *Total percent from 5/2020 to 5/2021. Source: Associated General Contractors of America
Proprietary | © 2021 CoreLogic, Inc. All rights reserved. CORELOGIC and the CoreLogic logo are trademarks of
CoreLogic, Inc. and/or its subsidiaries. 11Construction Confidence in the U.S.
In Q2 2021, the USG Corporation and U.S. Chamber of Commerce stated the
Commercial Construction Index increased three points from 62 in Q1 to 65.
Surveys indicate that 72% of contractors are experiencing project delays
due to COVID-19, down from 80% in Q1 . 84% of contractors are experiencing
at least one material shortage, up from 71% in Q1. 33% of contractors report
that their top material shortage is wood/lumber, up from 22% in Q1.
Sources: USG Corporation and U.S Chamber of Commerce
Proprietary | © 2021 CoreLogic, Inc. All rights reserved. CORELOGIC and the CoreLogic logo are trademarks of
CoreLogic, Inc. and/or its subsidiaries. 12CoreLogic tracks construction costs for commercial, residential
and agricultural construction of all types by researching a
basket of goods (labor and materials) all around the United
States and Canada. This research is conducted monthly, which
allows us to monitor fluctuations to commonly used materials.
For more information, please call:
855.267.7027
Proprietary | © 2021 CoreLogic, Inc. All rights reserved. CORELOGIC and the CoreLogic logo are trademarks of
CoreLogic, Inc. and/or its subsidiaries. 13You can also read
