Washington, September 9 — Repair and remodeling costs for U.S. homes rose at their fastest pace in two years during the second quarter of 2026, according to a report by Verisk Analytics released on Wednesday. The company’s index, which tracks more than 10,000 line items across 31 repair and remodeling categories including appliances, windows, and partial roof replacements, jumped nearly 1% from April through June. This compares to 0.47% quarterly growth at the end of 2025 and a revised 0.69% growth over the first three months of 2026.
Verisk attributed much of the increase to the conflict in Iran, which has tangled global supply chains and caused energy prices to spike. The report stated, “The conflict in Iran and the resulting rise in oil prices, energy costs, inflation and interest rates account for much of the movement.” The index flagged 2.88% growth from a year ago, but Verisk noted that repair and remodeling costs lagged growth in the consumer price index (CPI), which rose 3.8% in April, 4.2% in May, and 3.5% in June.
Greg Pyne, vice president of pricing for Verisk Property Estimating Solutions, explained in the index update that higher oil prices directly impact building products like asphalt roofing and PVC pipe, as well as transportation costs due to increases in diesel and jet fuel. The report also warned of more increases ahead, citing manufacturing lags and expectations that damaged infrastructure limiting oil production and refining capacity across the Middle East could take months to restore, even if the war ended soon.
The conflict, now in its seventh month, has seen tit-for-tat airstrikes between the U.S. and Iran push global crude oil prices above $100 per barrel again this week. Regionally, repair and remodeling costs increased more quickly on a quarterly basis in all nine U.S. census regions, with the largest increases in East North Central and East South Central states, which posted quarterly growth over 1.15%.
Twenty-one states experienced quarterly increases exceeding 1%, with the largest gains in Arkansas, Kentucky, and Wisconsin. These rising costs are likely to further dampen real estate investor optimism in the fix-and-flip segment, which has faced margin pressure from high acquisition and holding costs, softening after-repair values (ARVs), and sluggish resale demand amid rising mortgage rates.
During the second quarter, 5% more flippers missed their ARV target than exceeded it, marking the fourth time in the past five quarters that more flippers missed than exceeded their target, according to survey findings published in early August by investor-lender Kiavi and housing advisory John Burns Research and Consulting. The report was authored by Ryan Kingsley, a senior staff writer at Scotsman Guide.
