The real reasons Charlotte home remodeling costs aren’t dropping — even when material prices do

The real reasons Charlotte home remodeling costs aren’t dropping — even when material prices do

Homeowners often ask a reasonable question: If material prices have stabilized, why does remodeling still feel so expensive?

Over the past year, headlines have highlighted easing supply chain disruptions and cooling material volatility. Compared to the chaos of 2021 and 2022, the construction industry does feel more predictable. Yet predictability is not the same as affordability — and Charlotte home remodeling costs have not returned to pre-pandemic levels.

The reason is simple: materials are only one part of the total cost of a renovation. In 2026, the strongest cost pressures come from labor availability, skilled trade wages, demand for remodeling, project management, and the complexity of delivering code-compliant, professionally managed work.

Understanding where those costs come from can help homeowners be more realistic about potential costs in planning for an upcoming remodeling project.

Material prices have stabilized—but at a higher baseline

Material pricing today is far calmer than it was during peak supply-chain disruption. However, “stable” does not necessarily mean “low.”

According to the National Association of Home Builders| NAHB, building material prices increased approximately 3.5% year over year as of January 2026, with metals and specialty products remaining particularly sensitive to market conditions.

Trade publications, including Qualified Remodeler, describe 2026 as a year of normalization rather than correction. In other words, the industry has adjusted to a new pricing baseline rather than reverting to the cost structures it used in 2018 or 2019.

While the pricing of some individual products may fluctuate or briefly decline, most materials remain priced higher than they were before the pandemic due to higher manufacturing costs, increased transportation expenses, and ongoing global demand.

What this means for homeowners:
Material prices may feel less volatile, but overall renovation budgets still reflect higher long-term material costs than many homeowners remember.

Labor is the largest—and most constrained—cost driver

For most Charlotte home renovation projects, skilled labor represents the single largest portion of the total cost. And in 2026, skilled labor remains in short supply.

The construction industry continues to face a significant workforce gap. Associated Builders and Contractors estimates that the industry will need approximately 349,000 additional workers in 2026 to meet existing demand.

Federal data supports this trend. Construction job openings remained near 292,000 at the end of 2025, signaling sustained demand for experienced tradespeople, according to the Bureau of Labor Statistics and Construction Dive. 

As demand continues to outpace supply, wages have understandably increased. NAHB reports that average hourly earnings for residential construction workers reached $39.63 in December 2025, representing a 3.3% year-over-year increase.

In addition to wages, remodelers must account for rising benefit costs, workers’ compensation, and payroll-related expenses. The Bureau of Labor Statistics’ Employment Cost Index shows continued upward pressure on total compensation across construction trades.

What this means for homeowners:
Even if materials stabilize, the cost of employing skilled professionals — such as framers, electricians, plumbers, tile installers and finish carpenters — continues to rise. These are the people responsible for the quality, safety, and long-term durability of your project.

Installed cost is not the same as material cost

Homeowners understandably focus on visible products — tile, cabinets, plumbing and electrical fixtures — because those are easy to compare online. But a remodeling quote should reflect far more than the price of individual materials.

A typical renovation includes:

• Demolition and debris removal
• Structural adjustments or framing corrections
• Plumbing and electrical modifications, often driven by code
• Waterproofing and substrate preparation
• Finish installation and detailing
• Scheduling and coordination of multiple trades
• Permit acquisition and inspections
• Insurance coverage and warranties

Industry analysis consistently shows that installed cost — not material cost — is what drives renovation pricing, with labor and management representing the majority of the budget, according to qualifiedremodeler.com.

What this means for homeowners:
Comparing product prices online does not provide a realistic picture of what it takes to deliver a completed, inspected, and professionally managed project.

Overhead costs support quality, safety, and accountability

Professional remodeling includes layers of oversight and protection that are often invisible — but are essential to the success of your project. Here are just a few: 

Project Management and Supervision

Coordinating schedules, managing trades, monitoring quality, addressing unforeseen conditions, and documenting progress requires experienced leadership. Effective project management reduces delays, controls risk, and ensures accountability throughout the build.

Insurance and Risk Management

Insurance costs remain a critical part of the construction landscape. Analysts note that while some insurance markets have stabilized, contractors still face significant premiums for general liability, auto, and workers’ compensation coverage. 

Permits and Code Compliance

Even modest renovations may trigger updated Building Code requirements for electrical safety, ventilation, plumbing, structural reinforcement, or energy efficiency. Permits, inspections, and documentation all require time and expertise to navigate.

What this means for homeowners:
Overhead costs exist to protect homeowners, ensure compliance, and reduce the likelihood of costly mistakes, delays, or future repairs, but they do add to the bottom line of a project.

Remodeling demand remains strong in 2026

Despite economic uncertainty, remodeling demand continues to hold steady.

The NAHB Remodeling Market Index closed 2025 at 64, a number that indicates strong contractor confidence and ongoing project activity.

Harvard’s Joint Center for Housing Studies projects that home improvement and repair spending will reach approximately $524 billion in early 2026, followed by a gradual slowdown rather than a sharp decline.

Their Leading Indicator of Remodeling Activity anticipates growth easing from roughly 2.9% early in 2026 to about 1.6% by year’s end, reflecting moderation—not contraction.

What this means for homeowners:
Sustained demand keeps experienced contractors booked and supports steady pricing.

The “rate lock” effect is keeping homeowners in place

Another major factor supporting remodeling demand is the cost of moving.  This includes:  Realtor fees, closing and moving costs, repairs and upfit of the current, and perhaps the new home.  If you like your existing home, location, proximity to shopping, church and schools, consider a home remodel or home addition project.  Consider saving those extra selling costs and reinvesting in your existing home.

Many homeowners hold mortgage rates significantly lower than current market rates. Selling and purchasing a new home often means trading a low rate for a much higher one — making home remodeling a more attractive option.

NAHB economists cite this “rate lock” effect as a major driver of continued remodeling activity, particularly among homeowners choosing to adapt their existing homes rather than relocate.

What this means for homeowners:
More households are renovating instead of moving, increasing competition for skilled labor and reinforcing pricing stability.

How homeowners can plan more effectively in today’s market

While costs may not be falling, homeowners can still take steps to manage their investment wisely.

An interest rates drop this spring is expected to bring some positive momentum for the real estate market, home remodeling and additions.

Homeowner should select a Professional Residential General Contractor who will work hand-in-hand with you on these key items:

• Defining Project Scope Early

Clear decisions about layout changes, plumbing and utility connections, and structural work help avoid costly revisions later in the process.

• Establishing Realistic Allowances 

Allowances should be specific and tied to realistic product selections. Vague allowances often lead to change orders and budget overruns.

• Planning  Around Lead Times

Even with stabilized pricing, some products still require extended lead times. Early selections protect schedules and reduce last-minute substitutions.

• Providing a detailed Construction Agreement

A detailed Construction Agreement outlining inclusions, exclusions, assumptions, and timelines often provide better long-term value than the lowest initial number.

• Value-Engineering 

Reducing costs does not have to mean sacrificing quality. Preserving existing layouts, simplifying custom details, and selecting durable mid-range finishes can all help control budgets without compromising performance.

The bottom line

Remodeling costs in 2026 reflect more than material pricing alone. They are shaped by labor availability, skilled trade wages, strong demand, insurance and compliance requirements, and the realities of professional project delivery.

Material prices may fluctuate, but labor, expertise, and accountability remain the true drivers of home renovation costs — and those factors are unlikely to shrink anytime soon.

For homeowners, the most effective approach is not waiting for prices to fall, but planning carefully, working with experienced professionals, and investing with clarity and confidence.

By: Gary Palmer, NC & SC Residential General Contractor with 40+ years of Remodeling and New Construction Experience.

Let’s reimagine what your home can be.

Need help envisioning how a home remodel, home addition, sunroom, kitchen remodel or bathroom remodel could improve your family’s home? Reach out to us at https://palmercustombuilders.com/contact/ to take the first step. Want more information on how to avoid other costly mistakes? We suggest you check out our book. Remodeling and New Construction with No Regrets can help you ask the right questions to ensure your project fulfills your expectations.