Navigating the Rising Costs of Home Remodeling

In today’s dynamic economic landscape, homeowners are feeling the pinch of rising remodeling costs. A combination of inflationary pressure, cost of living and demand for materials has launched average budgeting for residential home improvement to nearly double in the past 10 years.

At Tenhulzen Residential, we understand the challenges these market conditions present, and spend much of our time educating our customers on this ever changing dynamic to guide the decision making process.

The Factors Behind Rising Costs

The cost of a given project continues to increase over time. We regularly receive inquiries from homeowners who may have contacted us several years ago, only to find out the exact same project is no longer the same budget cost.  In fact, in many cases the scope of work is still financially out of reach.

International trade has a significant impact on home improvement commodities, with prices for copper, steel, plastics, glass, and minerals all on the rise. Lumber mills are struggling to keep up with demand, leading to rationing and order backlogs. As prices rise, so do living costs, resulting in increased labor expenses. Even paint prices have risen to support recycling initiatives.

Lead times for materials like tempered glass are extending due to high demand for commercial buildings, while scheduling concrete has become increasingly challenging. Electricians are considering alternatives like aluminum wiring to offset copper costs. Roofing companies face shortages of fasteners from China, and imported tiles are delayed at U.S. ports due to customs backlogs. Additionally, manufacturers are operating at reduced capacity due to social distancing requirements in factories.

Move vs. Remodel

Tenhulzen Remodeling has been employing the same mark-up on materials, trade contractors and labor for 30+ years.  It’s not that we’re more expensive, rather the global market drives the cost. Experts recommend adding 15% to the total cost of similar projects from previous years. For instance, that $80,000 bathroom remodel last year would now be $92,000.   Which makes for quite a shock if you’ve been saving up for that project budgeted for 5+ years ago.

Moving costs could be equivalent to the improving the home you are currently in.  Especially when accounting for closing costs, moving, decorating and furnishing.  A recent customer decided to stop the design of their $180,000 basement remodel to pursue another house.  Six months after moving in, they reported uprooting their family for $120,000 of hard costs for a similar home, with a longer commute, different school district, and a significantly higher mortgage rate.

Making Informed Decisions

Cost is not the only factor.  Consideration must also be given to 6 other factors: Quality, Safety, Security, Timeliness, Cleanliness and Communication.

Interestingly, when we ask prospective customers how they would rank these in order of importance, it is typically:

Cost  |  Timeliness  |  Quality  |  Security  |  Communication  |  Safety

After the project is complete, the same list is presented and inevitably, the ranking is:

Communication  |  Quality  |  Timeliness  |  Security  |  Cost  |  Safety

It’s amazing how we are programmed to place a higher value on price before the purchase, and justify it with placing a higher value on other features of the experience.

At Tenhulzen Residential, we believe in empowering homeowners with the knowledge needed to make informed decisions. Whether you’re considering a minor update or a major renovation, understanding the investment potential is essential.