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.

Aug 20, 2026 - Remodeling Growth to Slow in 2027

• 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.
• The National Association of Home Builders (NAHB) reported that California, Texas, and Florida accounted for more than 20% of US remodeling spending in the first quarter of 2026. National remodeling spending totaled $274.7 billion at a seasonally adjusted annual rate, despite declining for a third consecutive quarter. California led with an 8.0% share, followed by Texas at 7.3%, and Florida at 5.5%, with the three states totaling $57.8 billion. Michigan posted the largest increase in remodeling spending on a four-quarter moving average basis, followed by Virginia, North Carolina, and Alabama. Although the 10 states with the strongest gains each recorded year-over-year growth of at least 2.9%, the number of states with declining spending doubled from the previous quarter to 10. NAHB forecasts flat inflation-adjusted remodeling spending for 2026.
• Affluent baby boomers are increasingly buying larger homes or expanding their existing ones instead of downsizing in retirement, reflecting changing priorities around aging, family gatherings, and long-term living, according to The Wall Street Journal. Rising home values and investment gains have given many older homeowners the financial flexibility to create homes with features that support aging in place, multigenerational visits, and entertaining. The trend is also reinforced by a limited supply of smaller homes and tax considerations that discourage selling. For the residential remodeling industry, growing demand for home additions, accessory dwelling units (ADUs), kitchen renovations, first-floor primary suites, and accessible design features could create sustained opportunities as older homeowners invest in making larger homes suitable for long-term use.
• According to The New York Post, an analysis from the Common Sense Institute found that permitting requirements in Arizona add an average of 23 days to residential project timelines, raising concerns about the impact of local bureaucracy on essential home repairs. The report reviewed 2.8 million permit records and found wide variations in approval times, fees, and requirements across jurisdictions. The findings come as the US housing stock ages, with the median owner-occupied home now 42 years old, according to the National Association of Home Builders. Nearly 49 million households report at least one needed repair. Researchers and housing experts say much of today’s remodeling spending is focused on critical systems such as roofs, windows, and HVAC units rather than cosmetic upgrades. The report suggests permitting delays can increase costs and make it harder to maintain safe, livable housing.

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.