What Does Inflation Mean For My Remodel Project?
Inflation has touched everything from grocery bills to airline tickets. So what does it mean for the remodeling industry, and for your own home project?
Here's our take: inflation doesn't mean you have to put your remodeling plans on hold. There's a strong case that planning now, with the right protections in place, is a smart move. Below we explain why, and share a simple inflation-battling remodel checklist you can use with any contractor.
What is inflation, and how does it affect remodeling?
To make a plan for remodeling in today's economy, it helps to understand what's actually going on.
Inflation is a rise in the price of goods and services over time. It reduces buying power: the same dollar buys less than it used to. A low, steady rate of inflation is normal and is a sign of a healthy economy. When it climbs quickly, it causes real problems.
In remodeling, you see inflation first in the cost of materials and labor. Lumber was a headline example when we first wrote this post (we covered it in What Do the Lumber Price Increases Mean for My Project). Those prices have leveled off since, but material costs as a whole have stayed higher than they used to be.
It isn't all doom and gloom. Wealth strategists generally agree that real property tends to hold up well when inflation rises. Physical assets like your home have intrinsic value and are priced in markets that help cushion inflation's usual effects. Your remodel may cost more because of higher labor and supply costs, but the value you add to your home is measured in that same market.
Understanding return on investment
High inflation or not, return on investment (ROI) is worth keeping in mind on any remodel.
Most of our clients remodel to make their current home, or a home they just bought, work better for them. We've helped homeowners update to sell, but it's far more common to work with families who want a home that fits their daily life and personality. Because the motivation is so personal, it's easy to forget about ROI and design only for yourself.
That can backfire if you need to sell and you're marketing a house with purple cabinets, or an elaborate craft room next to a dated kitchen. You can still have your dream craft room. The key is balance:
- Love purple? Try a purple-hued backsplash with a complementary wood tone on the cabinets.
- Planning a hobby space? Leave room in the budget for updates to the kitchen and bathrooms, the spaces buyers care about most.
- Protect your investment: shoddy craftsmanship and shortcuts always hurt ROI, so do your homework when interviewing contractors.
Accepting the current housing market
When inventory is low and new builds face their own delays, making the most of your current home is often your best option.
If remodeling costs more because of inflation, why not buy or build instead? Start with building. The same material and labor increases follow you there, if the materials are even available. In 2022, supply-chain disruptions in our region left some new homes waiting a year or more just to get power, as Valley News Live reported.
Buying might look tempting, but low inventory and high interest rates aren't an easy combination. For a deeper look at this decision, see our guide to remodeling vs. moving.
That leaves remodeling, which, done right, can make a dated floor plan feel brand new. Opening up the kitchen, transforming a primary suite, adding a home office or finishing a basement can change how you live as much as a new build would.
When your contractor also has a design team, you can turn the ideas you have for your home into practical plans your family will enjoy every day.
Wondering if now is the right time for your project? Talk it through with us in a free 15-minute remodel consult.
Family well-being over inflation worries
Making your home a retreat from everyday stress is one of the best returns you can ask for.
With a constant stream of news through TV, social media and the internet, a home that feels like a refuge matters more than ever. That looks different for every family:
- A basement play space with soft carpet for toddlers that grows into a teen hangout
- A TV room off the kitchen for hosting game days and movie nights
- A spa-style bathroom where adults can take a breath and reset
You can take the idea of a safe haven a step further with a green remodel that improves indoor air quality and helps lower utility bills.
Whatever a retreat looks like for you, your home should be the place for it: a space where you and the people you love can gather.
Remodel must-haves for any economic climate
These matter in any economy, and they matter even more when prices are rising. Use this inflation-battling checklist when you talk to contractors.
1. A fixed-price contract
You want a contractor who is upfront about the price of your project. Unexpected price jumps mid-project are one of homeowners' biggest fears, and a fixed price protects you from that, which is even more important during inflation. Learn more about fixed-price vs. cost-plus remodeling.
2. Financing help
A contractor who can offer advice on paying for your project is a plus. One who connects you directly to financing options is even better.
3. An experienced team
A positive return is possible even when prices are rising, but cut corners never help your home's value. Make sure your contractor has a trusted team behind them.
4. Proof of quality
Asking plenty of questions upfront helps you trust the process. Where are the cabinets sourced? How are coatings applied to walls or refinished cabinets? What experience does the design team bring? Ask them to show quality from the start so you can count on it at the end.
5. Strong communication
You want reassurance at every point of your remodel. Make sure there's a simple way to stay connected from day one to day done. Our clients use the Buildertrend online project portal.
Designed first, with one fixed price
Our Studio A designers plan your space with you first, and design is included with every remodel. Once your design is complete, you get one fixed price, so you know your number before work begins, no matter what the headlines say.
Inflation and remodeling FAQs
Should I wait for prices to come down before remodeling?
Not necessarily. Material and labor costs don't always drop back down, and waiting also means waiting to enjoy a home that works for you. A fixed price lets you plan with confidence.
Is remodeling still a good investment during inflation?
Real property tends to hold up well when inflation rises. Focus on quality work and balance personal touches with updates buyers value, like kitchens and bathrooms.
How can I protect my budget from rising prices?
Choose a contractor who gives you one fixed price before work begins, and plan your design fully up front so decisions aren't made mid-project.
Does design cost extra?
No. Studio A design is included with every remodel we build.