Home repair and remodeling costs have consistently risen, outpacing overall inflation, with a 3.4% jump in the second quarter compared to the previous year, surpassing the 2.7% rise in the Consumer Price Index for the same period. This trend is largely attributed to higher labor costs, as evidenced by a 1.2% increase in tile flooring replacement and 1% for bathroom remodels or vinyl siding replacement in Q2. Overall, repair and remodeling costs are 62% higher than a decade ago and 73% higher than in the first quarter of 2013.
Material costs are also a significant factor, with the NAHB Remodeling Input Price Index (RIPI) showing a 6.6% year-over-year increase in non-labor input costs in Q2 2026, accelerating from 3.9% in Q1. This marks the eleventh consecutive quarter of rising input costs for remodelers. Tariffs on imported goods, such as a 50% import tax on kitchen cabinets and bathroom vanities, and existing tariffs on steel, aluminum, and copper, further contribute to increased material expenses. John Lovallo of UBS estimates these cabinet and vanity tariffs could add approximately $280 to home costs.
Despite the rising costs, homeowner spending on maintenance and improvement projects increased in the first half of this year, reaching $510 billion in Q2, a 1.8% increase from a year earlier, according to Harvard University's Joint Center for Housing Studies. However, growth in spending is projected to slow in 2026 due to a weaker housing market. Homeowners are also responding to these pressures by tightening their budgets, with the median planned renovation spend for 2026 decreasing by $5,000 to $15,000, down from $20,000 in 2025, representing a 25% decrease, according to the 2026 U.S. Houzz & Home Study. The most cited challenges by homeowners are rising product and material costs (63%) and higher labor costs (31%).
