Residential Remodelers

The 132,700 residential remodeling contractors in the US remodel houses and other single and multi-family dwellings. Popular projects include additions to indoor and outdoor living space, and kitchen and bathroom remodels. Other sources of revenue include providing maintenance/repair services and updating structures to meet new building codes and energy efficiency requirements.

Cyclical Demand

Remodeling activity is highly cyclical, and follows broader economic cycles, according to the Joint Center for Housing Studies Harvard University.

Sensitivity to Interest Rates

Most homeowners rely on loans to finance remodeling projects.

Sep 20, 2026 - Remodeling Industry Adds Thousands of Firms

• The number of residential remodeling contractor establishments increased 25% between 2017 and 2022 to more than 128,000 businesses, according to recent analysis of Census Bureau data by Harvard's Joint Center for Housing Studies. Inflation-adjusted industry receipts nearly doubled from 2012 through 2022, reaching $129 billion, while average receipts per establishment topped $1 million. The expansion also reduced industry concentration as more firms shared in the market's revenue. Although the figures describe longer-term structural change rather than current monthly conditions, they show a remodeling market with significantly more competitors. Remodelers may face greater competition for customers, workers, and subcontractors even as the overall market has expanded.
• Remodeling remained one of the stronger residential sectors in the American Institute of Architects' second-quarter Home Design Trends Survey. The share of respondents reporting improving conditions minus those reporting weakening conditions was 38% for additions and alterations, up from 28% a year earlier, while kitchen and bath remodeling increased to 34% from 26%. Residential architecture firms also reported project backlogs averaging about 5.1 months, up from 4.9 months in Q2 2025. Improving design activity in additions, alterations, kitchens, and baths can support future project pipelines for residential remodelers, although architectural work typically precedes actual construction.
• New 50% US tariffs on roughly $20 billion of Canadian goods include plywood, engineered wood products, laminated veneer lumber, fiberboard, and Portland cement, the National Association of Home Builders reports. Steel, aluminum, and copper are also subject to separate tariffs of up to 50%. NAHB says building-material tariffs increase costs, disrupt supply chains, and add uncertainty. Remodelers frequently work on projects where material selections and budgets are established before construction begins, so sudden price changes can complicate estimates, purchasing, and customer expectations. Firms may need larger contingencies or shorter quote validity periods when the affected materials represent a significant portion of project costs.
• Home remodeling spending growth is expected to slow through mid-2027, according to the Leading Indicator of Remodeling Activity (LIRA) report released in July by the Joint Center for Housing Studies at Harvard. Homeowner spending on improvements and repairs is expected to increase by 2.1% to $517 billion in the third quarter of 2026, compared with Q3 2025. In the fourth quarter of 2026, remodeling spending will again rise by 2.1% from Q4 2025 to $520 billion. Spending growth will then slow to 0.7% in the first quarter of 2027, reaching $524 billion. In the second quarter of 2027, year-over-year spending is forecast to rise just 0.5%, dropping to a total of $519 billion. Remodeling, permitting, and building product sales have remained flat recently, and remodeling activity growth is projected to remain sluggish absent a rebound in US home sales.

Industry size & Structure

A typical residential remodeling firm employs three workers and generates about $1 million annually.

• There are more than 132,700 residential remodelers in the US employing nearly 458,000 workers and generating over $142.9 billion in annual revenue.
• The majority of establishments are small, with over 80% of residential remodelers employing fewer than five workers.
• Business models range from small family-owned firms, which may perform remodeling work themselves, to individuals serving as general contractors who hire employees and subcontractors to complete larger remodeling projects.
• The 50 largest residential remodeling firms (500 to 999 employees) generate only about 7% of the industry’s revenue.
• Residential remodeling spending reached about $503 billion in the fourth quarter of 2024 and is expected to rise to $512 billion by the fourth quarter of 2025, according to Harvard’s Joint Center for Housing Studies.