Prices for home remodeling outpaced inflation in the second quarter due to labor costs

LOS ANGELES (AP) — If it seems like its getting more expensive to replace a broken door, kitchen fixtures or upgrade a major appliance, you’re not wrong.

The cost of home repair and remodeling projects is up compared to a year ago and running ahead of inflation overall, according to a report from data analytics company Verisk.

The firm’s latest Repair and Remodeling Index jumped 3.4% in the April-June quarter compared to the same period last year. That’s a bigger annual increase than the 2.7% rise in inflation in the same period, as measured by the Consumer Price index.

The index, which tracks costs for more than 10,000 home improvement products, including appliances, doors, plumbing and windows, showed a roughly 0.6% increase from the January-March quarter.

“While costs did continue to rise, they rose at a slower rate than in the first quarter,,” said Greg Pyne, vice president of Pricing at Verisk Property Estimating Solutions.

Much of the increase in home repair and remodeling costs appears to be driven primarily by higher labor costs for repair and remodeling work, Verisk noted.

The second-quarter jump in costs for home improvement products coincided with the Trump administration’s broad rollout of tariffs on imported goods from many of the nation’s major trading partners. But the tariffs didn’t have the expected impact given they were postponed several times and didn’t fully take effect until early August, midway through the third quarter.

However, homeowners looking to replace cabinetry could soon see prices increase sharply, following a new volley of tariffs announced by President Donald Trump last week that includes a 50% import tax on kitchen cabinets and bathroom vanities due to kick in on Wednesday.

The most labor-intensive types of home repair or remodeling work registered the biggest quarterly increases in labor costs. For example, the cost of replacing tile flooring rose 1.2%, while the cost of remodeling a primary bath or replacing vinyl siding each rose 1% in the April-June period from the previous quarter.

Nearly all of the 31 categories of repair and remodeling work tracked by Verisk saw costs increase at least slightly.

The latest index puts costs for repair and remodeling at almost 62% higher than they were 10 years ago and more than 73% higher than the first quarter of 2013, when the index debuted.

After declining the past two years, homeowner spending on maintenance and home improvement projects increased in the first half of this year, according to researchers at Harvard University.

The university’s Joint Center for Housing Studies’ most recent leading indicator of remodeling activity, or LIRA, estimates spending hit $510 billion in the second quarter, a 1.8% increase from a year earlier. However, the researchers project that growth in spending on home improvement and maintenance will slow in 2026, citing weakness in the housing market and slower construction of new homes.

The housing market has been in a slump since 2022, when mortgage rates began climbing from historic lows. Sales of previously occupied U.S. homes sank last year to their lowest level in nearly 30 years. And, so far this year, sales are running below where they were at this time in 2024.