What remodeling costs and how to read a contractor's quote

The Bureau of Labor Statistics index for goods used in home repair and remodeling stood at 336.7 in August 2026, its highest value in a series that starts in 1986. That was 7.7% above August 2025 and 52.1% above January 2019. This guide explains what the index measures and what it leaves out, then how to read a contractor’s quote line by line, including the permit fees in it.

The materials index

The Producer Price Index, or PPI, measures the prices that U.S. producers receive for what they sell, before any retail markup. BLS builds a set of input indexes from it for each type of construction. The one for residential maintenance and repair tracks the average change in prices of the domestic goods that home repair and remodeling consume, weighted by how much of each the industry buys. BLS says these input indexes exclude capital investment and labor.

The index rose from late 2020 to a high of 314.4 in June 2022 and stayed below that level through December 2025. It then rose in seven of the first eight months of 2026, and August 2026 was 7.1% above the 2022 high.

Producer price data are usually published between the 9th and the 16th of the month after the month they cover, according to BLS. Its price adjustment guide says the not seasonally adjusted figures can be revised for up to four months after first publication, and the version published four months later is final. As of October 3, 2026, the values for May through August 2026 can still change. The next release is scheduled for October 15, 2026.

What the index leaves out

The index measures what producers charge, which is less than what a contractor pays a supplier and less than the installed price you pay. It covers goods only. Labor, overhead and the contractor’s profit are outside it. It is also a national figure, with no breakdown for southeastern Pennsylvania.

Labor has its own source. In BLS’s Occupational Employment and Wage Statistics survey for May 2025, the median hourly wage for carpenters in the Philadelphia-Camden-Wilmington metropolitan area was $29.70. The median is the middle value: half of carpenters in the area earned more and half earned less. That is a wage, before the employer’s payroll taxes, insurance and the contractor’s markup.

How to read a quote

The public sources in this guide cover material prices, wages and permit fees, and none of them gives a typical price for a kitchen, bath or addition in the area. The comparison that counts is between written quotes for your own project. Pennsylvania’s Home Improvement Consumer Protection Act shapes what a quote has to show once it becomes a contract. The contract must state the total sales price, or the terms of a time-and-materials arrangement with a written cost estimate. It must describe the work and the materials, with specifications, which the act defines to include plans, drawings, lists of materials and stated allowances. And it must list the down payment and the cost of any special-order materials separately. The contractor hiring guide lists every required term.

When you compare two quotes, line them up on these points:

• Scope. Check that each quote covers the same rooms, demolition, repairs to hidden damage, finishes and cleanup.
• Allowances. An allowance is a placeholder amount for items you have not chosen yet, such as tile or light fixtures. If you pick something that costs more, you pay the difference. Compare the allowance amounts, since a low allowance makes a quote look cheaper.
• Materials and labor. Ask for them as separate lines, or at least for the main material quantities. A single lump sum hides which part changed between two quotes.
• Permits. Ask whose name goes on the permit and whether the fee is in the price. The permits guide lists each municipality’s office.
• Special-order items. The act defines special-order materials as items made for your job that the contractor cannot return for credit, and it lets the deposit include their cost when the contract designates them.
• How long the price holds. Ask the date the quote expires and whether any line can change before you sign.

Permit fees in a quote

Permit fees differ by municipality and by how each one measures the job. The table works through the building permit fee on a $40,000 remodeling contract, using each municipality’s published schedule. It is an example with a round number, not a quote for any project, and electrical, plumbing and mechanical permits are separate.

Plymouth’s schedule comes from its residential code package revised in April 2022. Ask the township for its current schedule before you rely on it. West Conshohocken posts a fee schedule dated January 2026, and Whitemarsh’s application asks for fees at submission; check with each office.

Price escalation clauses

Some contractors propose a clause that raises the price if material costs rise before the work is done. BLS publishes a guide for contracts that tie a price to a PPI. Its method divides the index for the adjustment month by the index for the base month and multiplies the base price by the result. The guide says a contract should name the index, refer to the base and adjustment months rather than to index values, and say on what date the calculation is made, since recent months are revised. If a clause like this is in your contract, have a lawyer review it.

The outlook for remodeling

The Joint Center for Housing Studies at Harvard publishes a quarterly forecast of national spending on improvements and repairs to owner-occupied homes, called the Leading Indicator of Remodeling Activity. Its July 23, 2026 release projected that annual spending would continue losing momentum through mid-2027. The forecast is national and does not cover rental homes.

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