- Remodeling spending grew 51% from 2019 to 2022, reaching $611 billion.
- Inflation drove a 17% increase in homeowners insurance premiums between 2021 and 2023.
- Immigrants made up 34% of the 2023 construction labor force, highlighting labor vulnerability.
- Homeowners 65+ accounted for 27% of remodeling spending in 2023—more than double 2003 levels.
- $139 billion was spent on energy-efficient upgrades in 2023, nearly 4x the amount in 2003.
Remodeling in Peril? The Squeeze from Inflation and Labor Shortages
The $600 billion remodeling industry represents more than just a marketplace for home upgrades—it protects America’s aging housing stock, improves energy efficiency, and shapes how millions age in place. But new research from the Harvard Joint Center for Housing Studies (JCHS) reveals increasing pressure from inflation and labor shortages that could challenge the industry’s ability to adapt in the coming years. For homeowners and real estate investors—especially in high-demand markets like Las Vegas—the stakes have rarely felt higher.
Remodeling as a Resilient but Vulnerable Sector
Home improvement in the U.S. has seen dramatic growth in a short period. According to the JCHS report, annual homeowner improvement and repair spending surged from $404 billion in 2019 to a remarkable $611 billion in 2022. This wasn’t just a post-pandemic splurge. Spending is projected to stay above $600 billion per year through at least 2025, showing that interest in home upgrades isn’t diminishing quickly.
But this overall growth can hide increasing weak points. Demand remains strong mainly because the U.S. housing stock is getting older. There’s a continuous need for rehabs and upgrades, especially for aging in place, improving storm resistance, or just maintaining structural integrity. Yet, the remodeling industry—like many sectors linked to housing and construction—is walking a tightrope of increasing costs and limited capacity.
Furthermore, adding to the instability is the uneven geographic spread of remodeling demand. Thriving metro areas like Las Vegas face especially strong pressure, with robust market activity balanced out by limited labor and increasing operating costs. Despite its recent gains, the remodeling industry’s long-term health may hinge on how well it deals with these compounding challenges.
Inflation: The Silent Remodel Killer
Inflation is often presented as a short-term economic issue, but in remodeling, its effects are lasting and deeply rooted. Everything from materials to labor to insurance is impacted, and these increases affect both contractors and homeowners directly.
The Cost of Doing (Remodeling) Business Is Going Up
Raw materials, for example, have seen percentage increases in cost that are in the double digits. For lumber—a material crucial to nearly every remodeling project—prices spiked significantly during the pandemic and have stayed unstable since then. The same is true for copper wiring, drywall, asphalt shingles, and even paint—all essential for keeping up and upgrading older homes.
Homeowners insurance premiums increased 17% between 2021 and 2023—a cost paid by consumers that further raises the price of owning and upgrading a home. When projects include expensive structural renovations or the installation of new high-efficiency systems, these higher insurance costs discourage many from starting projects at all.
Hidden Effects and Supply Chain Friction
Tariffs on imported building materials—from Chinese flooring products to Canadian softwood lumber—have further complicated budgeting. Supply chain delays, initially caused by the pandemic but continued by logistics shortages and global instability, have added months to project timelines and thousands in unexpected carrying costs or temporary housing for families.
Essentially, inflation not only pushes costs up, but it also introduces unpredictability—one of the riskiest things in any construction timeline. For households with limited budgets, it means putting off needed repairs. For investors and contractors working on small profit margins, it might mean the difference between a successful flip and a financial failure.
Labor Shortages: Truly Skilled Hands Are Hard to Find
The home improvement industry has long relied on its skilled labor force—from master electricians and HVAC technicians to framers and finish carpenters. But those workers are getting older, and not enough new ones are entering the field.
Shrinking Workforce, Rising Demand
Since at least 2015, the construction industry has dealt with ongoing labor shortages. In 2023, 34% of all construction and remodeling workers were immigrants—a vital part of the workforce that is now uncertain because of stricter immigration policies and unstable visa programs. These situations especially affect metro areas like Las Vegas, where residential and commercial building booms compete for the same workers.
Additionally, many trade professionals left the workforce during the pandemic, either because of early retirement or job changes, and fewer young workers are entering the trades. While apprenticeship programs and technical schools offer some replacement, interest in manual labor careers has not kept pace with the need.
Impacts on Projects and Pricing
The clear results of the labor shortage are seen in many ways
- Postponements in project start dates, sometimes stretching 3–6 months or longer
- Cost increases as labor scarcity increases hourly wages
- Quality problems as less skilled workers are brought into complex tasks
Projects that once took eight weeks now take twelve. Subcontractors may be booked two or three times over. Homeowners and investors are often forced to pick between speed and quality—something many don’t have the option to do.
In cities like Las Vegas, this is made worse by simultaneous infrastructure and tech projects needing the same tradespeople. Large-scale developments on The Strip or local data center construction draw from the same hiring pools that remodelers use, raising wages and lengthening waitlists.
Aging Housing Stock Brings Urgency
The need for remodeling isn’t a luxury—it’s a pressing national maintenance issue. The average age of U.S. homes is now 44 years. Homes that old need much more than cosmetic updates. They’re often built to outdated codes with old-fashioned systems and materials.
Older Homes Need Bigger Fixes
Homes built before 1980 reportedly cost 24% more to remodel and 76% more to maintain per year. Many have aging electrical wiring, single-pane windows, and poor insulation not suited to current environmental conditions. Others may have lead paint, asbestos-containing materials, or outdated plumbing still in use.
In cities like Las Vegas, widespread development between the 1950s and early 2000s means that thousands of properties are entering their decades that require more upkeep. Newer features like solar power or even working attic ventilation often require adding them in later—another layer of complexity and cost.
Energy Inefficiency and Health Concerns
Aging homes are often energy-inefficient, leading to rising utility bills and adding to carbon emissions. In hot areas, homes lacking modern HVAC systems can create health risks for seniors or people with health issues during very hot weather.
Dealing with this aging stock is essential—requiring available labor and financing options to make needed renovations achievable.
Demographic Dynamics Changing the Market
The changing look of American homeownership is reshaping the remodeling industry. The biggest spenders are changing—both in age and demographic profile—which has real effects for the types of projects done and how they’re paid for.
Silver Tsunami Spurs Remodeling Demand
In 2023, homeowners aged 65+ represented 27% of total remodeling spending—over twice their share from 2003. This is part of a wider trend sometimes called the “Silver Tsunami,” where aging Baby Boomers are choosing to stay in their homes rather than downsize or move to senior living communities.
These homeowners usually invest in accessibility changes like
- Wider doorways and hallways
- Walk-in tubs and showers
- Elevator installations in multi-story homes
- Raised countertops and anti-slip flooring
Rising Diversity in Investment and Ownership
At the same time, immigrant homeowners and people of color are also a growing force in the remodeling area. They contributed 23% of national remodeling spending in 2023, compared to just 14% twenty years ago. These groups often invest not just in maintenance but in multigenerational housing and efficiency upgrades—adding separate entrances, units, or accessory dwellings.
Understanding these changing demographics helps predict demand types (e.g., accessibility vs. luxury) and decide resource allocation strategies nationwide.
Change in Weather Spurs Renovation Demand
As weather events become more frequent and intense, strong construction has moved from a niche concern to a necessary practice. Damages from disasters are increasingly common, creating billions in home repair demand every year.
A Decade of Disruption
From 2022 to 2023 alone, the U.S. recorded $49 billion in disaster-related home repair costs. States affected by hurricanes, wildfires, floods, or freezes face ongoing reconstruction costs. In Las Vegas, very hot weather and a rising number of air quality alerts show the growing need for upgraded HVAC systems, insulation, and strong exterior materials.
Energy Efficiency Takes Center Stage
In 2023, U.S. homeowners spent $139 billion on upgrades to improve energy efficiency like
- Solar panel installations
- Window replacements with low-E glass
- Heat pump systems
- Insulated roofing and siding
That number is a 400% increase from similar spending in 2003. As federal and local policies encourage sustainable design, these numbers are likely to increase—making energy efficiency both a necessity and a valuable investment.
Why This Matters for the Las Vegas Market
Las Vegas shows the difficulties and chances of the modern remodeling industry. The region’s housing mix includes not only aging properties but also homes poorly prepared for today’s weather.
The Supply-Demand Imbalance
With both commercial and residential sectors thriving, skilled labor is heavily needed. Big-money projects like casinos, arena developments, and mega-resorts take talented tradespeople away from residential renovations. That makes even small bathroom remodels or kitchen redos take longer and cost more.
Rising Stakes for Homeowners and Investors
Las Vegas homeowners dealing with temperatures over 110 degrees each summer can’t afford to take risks with inefficient cooling systems. Investors hoping to quickly flip properties may find themselves stuck in scheduling problems or cost increases.
Impacts on Local Home Value and Flip Potential
The remodeling crunch isn’t just an inconvenience; it’s affecting investment plans.
For Flippers
Unpredictable labor and material costs reduce profit margins. Projects often go over both budget and timeline, lowering return. Finding dependable general contractors and trades can delay project starts by weeks or months—disrupting rehab schedules needed for fast-turn strategies.
For Retirees and First-Time Buyers
Older buyers focused on aging-in-place upgrades face high cost barriers. First-timers buying older homes often underestimate the cost of updating outdated infrastructure and finishings. This leads to purchases they regret or expensive secondary loans to pay for renovations.
Opportunities Despite the Pressures
While the outlook has difficulties, there are clear education, policy, and investment routes forward.
- Trades training programs—especially those aimed at youth, veterans, and new Americans—can rebuild the skilled labor base.
- Energy subsidies and rebates, like those under the Inflation Reduction Act, provide affordable ways to get high-performance equipment and retrofits.
- Local contractor checking platforms make trustworthy hiring easier, helping prevent fraud and cost increases.
- Remodel aggregators, including co-op purchase platforms, allow homeowners to group together to get better deals on services and labor.
How Steve Hawks Counsels Homeowners and Investors
Las Vegas real estate expert Steve Hawks advises clients based on real world situations
- Include inflation buffers in every project budget
- Prioritize high-return upgrades, like insulation, roofing, energy systems
- Avoid unreliable contractors, even with lower quotes—quality is more important than cost
- Plan renovation timelines wisely, matching upgrades with seasonal market cycles or expected listings
With proper planning and market understanding, remodeling can still add value—even in tougher economic conditions.
Financing and Policy Can Bridge the Gap
Policy and finance changes are essential to making remodel access more available.
- Low-interest loans and grant programs make essential work possible for older adults and lower-income families.
- Expanded immigration pathways provide more labor force stability.
- Material trade policy changes could help reduce supply bottlenecks and pricing spikes.
By combining practical financing options with smart policy, both contractors and homeowners can engage in remodeling with more confidence and responsibility.
Remodeling as a Long-Term Housing Bet
Despite inflation and labor gaps, the remodeling industry isn’t shrinking back—it’s changing. It serves 145 million housing units that continue to age every day. The demand is lasting. For homeowners in Las Vegas and nationwide, strategic investment in maintenance, energy efficiency, and accessibility will continue to provide benefits. With the correct guidance, remodeling remains a dependable housing strategy—even in difficult times.
Final Takeaway for the Las Vegas Community
In the changeable remodeling situation of 2024 and after, hesitation comes with a cost. Inflation isn’t likely to decrease much, and labor limits aren’t easing soon. Las Vegas homeowners would be wise to follow Steve Hawks’ advice: act thoughtfully, act soon, and always plan ahead. With the right team, investments in remodeling can overcome today’s financial challenges and build value for the future.
Citations
Harvard Joint Center for Housing Studies. (2024). Improving America’s Housing 2025. Retrieved from http://www.jchs.harvard.edu/improving-americas-housing-2025-embargoed