As per the Bureau of Labor Statistics press release on May 11^th, construction and building material costs have increased by 3%. However, the price of some commodities individually has skyrocketed. One of the prime examples of such an increase is the 25% increase in brick cost, which is the primary material for any kind of construction. Coupled with a shortage of skilled labor at a cheaper cost, contractors and subcontractors have also increased their base prices, as Wall Street reporter Rachel Wolfe reported.

She said, "It has led to these projects just dragging out and dragging out" and further added that many people are living in half-finished accommodations because they have run out of financial resources. Apart from that, the lack of skilled workers also contributes to this large number of unfinished yet inhabited houses.   

As of today, it is estimated that the skilled worker gap in the construction industry stands at a whopping 546, 000 workers. This data was provided for 2023 alone by Associated Builders and Contractors. Moreover, the situation worsens since homeowners only hire contractors during renovation or remodeling and not throughout the year.

According to a survey by Houzz, an online marketplace for home renovations, homeowners are placing a greater emphasis on improvement projects this year rather than moving to a new property, despite the increased materials costs. This shift can be attributed to more homeowners choosing to stay in their current homes due to the historically high mortgage rates that discourage trading up. Most homeowners planning to renovate are primarily focused on remodeling their bathrooms or kitchens. However, a smaller percentage is considering hiring professionals to enhance electrical wiring or cabinets.

At present, remodeling a kitchen takes around $20,000, whereas bathroom renovation costs an average of $13,500. This is an increase of $12,000 and $8,000 since 2008, respectively. Similarly, the contractors also face a price hike in essential products (apart from labor) required for construction. Most contractors and subcontractors like TOV Restoration feel that they are being squeezed between inflating prices and fleeing customers.

However, as per a study carried out by Harvard University, spending on home upgrades has been on the rise in the past two to three years. 22.5 Million was spent in 2019, whereas 24.5 Million was spent in 2021. This data can be interpreted in two ways. The first is that homeowners are not deterring from upgrades even with the price increases. The second way of looking at this data is that the same (or less number of) renovation is being carried out, but the pricing inflation resulted in more money being spent.

Therefore, any construction or remodeling expert like TOV Restoration will tell you the same thing. Construction and remodeling costs will be higher this year and will keep increasing YoY. Therefore, today is the time to get your renovation or remodeling done. You wait more, and you will have to pay more for the same remodeling work in the future.