Remodelers in the Know: Winter 2026 Industry Trends
Stay on top of industry news, current trends and material cost changes with Clear Estimates’ Remodelers in the Know news bulletin!
Each quarter, Clear Estimates summarizes industry news and updates, along with our current material cost data analysis, together in this free & convenient quarterly digest.
In this edition we look at the remodeling industry outlook in the first quarter of 2026.
What Often Kills a Contracting Business and How to Prevent It
A recent article from the Journal of Light Construction sheds light on why construction businesses fail.
According to JLC, company debt often starts with underbidding, rushed estimates, and incomplete contracts.
Cutting your profit margin creates a cycle of underbidding. JLC explains that many contractors have steady work, but inaccurate estimates often lead to profit losses.
The strongest contractors protect themselves by setting healthy markups, improving sales skills, rejecting bad-fit clients and consistently building cash reserves.
See the full article from JLC here.
Source: Journal of Light Construction
Remodeling growth set to downshift in late 2026 (Harvard JCHS – LIRA)
Remodeling spending continues to grow, but momentum is slowing. Year-over-year industry growth is expected to drop from 2.9% to around 1.6% by the end of 2026.
According to the study by Harvard Joint Center for Housing Studies, modest growth in home sales should boost demand in the near term. Despite the slowdown, total spending on home improvements is expected to reach $522B by the end of the year.
Interest rates are still up in the air, and easing rates could supercharge remodeling spending. In the meantime, contractors should plan for tight competition, long sales cycles and more margin pressure as growth slows.
See the full article from LBM Journal here.
Source: LBM Journal
Remodeling Labor Challenges Persist, But Contractor Outlook Is Improving
Quality and availability in the labor market have worsened, according to the Home Improvement Research Institute. Still, homeowner demand is stronger than expected in 2026.
A recent article from Kitchenbathdesign.com shows 57% of remodeling contractors still expect revenue growth in 2026, with many remodelers remaining cautiously optimistic despite current labor challenges.
For now, homeowners are prioritizing essential home repairs and smaller remodels, creating steady project opportunities.
Contractors who focus on efficiency and smarter use of tech are in the best position to come out ahead in 2026.
Read the full article from Kitchenbathdesign.com here.
Source: Kitchen & Bath Design News
Clear Estimates Material Pricing Trends - Q1 2026
Over the past quarter, cedar fencing costs have continued to stabilize after volatility seen during the pandemic, though we expect modest increases over the next quarter.
Fencing materials themselves remain one of the most important indicators in fencing project costs, representing nearly half of total expenses.
Regional pricing shows a clear north–south band of higher costs running through the central U.S., while prices along the coasts remain comparatively lower.
Several broader material trends stood out this quarter:
Insulation costs declined nationwide, falling by approximately 22% on average.
Roofing and concrete moved against the broader cooling trend, with asphalt shingles leading price increases. Roofing costs rose in every region, averaging a 9.4% increase and peaking at 13.3% in the Southeast.
Drywall pricing showed notable regional differences. While prices declined in the West, SW and NE, the Midwest saw an 18% increase (largely a correction from unusually low prices seen last quarter).
Masonry and fencing materials delivered consistent savings. Brick prices fell 10.5% nationwide, and pressure-treated fencing declined sharply, especially in the Southeast where prices dropped 26.4%.
Dimensional lumber exhibited the most polarized regional behavior of any category. The Midwest and Southwest experienced significant increases (+28.9% and +15.7%), while the Northeast and West saw prices fall by 16.6% and 13.5%, respectively.
What This Means for Contractors
- Slightly cooler material pricing in many regions can help protect margins if estimates are updated regularly.
- Labor remains a major cost driver in 2026, making accurate, current labor rates essential when qualifying jobs. Clear Estimates offers the most up to date rates built in automatically.
- Ongoing regional price divergence means national averages aren’t enough, local data matters more than ever. We provide locally sourced and regularly updated cost data as part of your Clear Estimates subscription.
- Categories like roofing, concrete, and lumber can swing project costs quickly, increasing the risk of underestimating.
- Contractors using updated pricing in Clear Estimates can bid with more confidence, reduce surprises, and price work more competitively.
This information is sourced from Clear Estimates’ Q1 2026 Quarterly Behavior Index.
Clear Estimates draws on a wide range of data sources to provide accurate & reliable material & labor costs, covering all 50 States. This makes it easy for remodelers to estimate their jobs accurately and in a fraction of the time.
Each quarter Clear Estimates publishes our Quarterly Behavior Index, where we examine material cost trends per region across the US.
See the current Clear Estimates Quarterly Behavior Index here!
Source: Clear Estimates
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