Residential Remodelers NAICS 236118

        Residential Remodelers

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Purchase Report

Industry Summary

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.


Recent Developments

Aug 15, 2025 - Home Remodeling Spending to Soften
  • Home remodeling spending growth is expected to remain flat in 2025 and the first half of 2026, according to the Leading Indicator of Remodeling Activity (LIRA) report by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase 2% to $509 billion in the third quarter of 2025 compared to Q3 2024. In the fourth quarter of 2025, remodeling spending will rise quarter-over-quarter to $511 billion, up 1.8% from Q4 2024. Spending will increase to $524 billion in Q1 2026, up 2.2% from Q1 2025. In the second quarter of 2026, year-over-year spending is forecast to rise 1.2% to $518 billion. Joint Center expects a weak housing market to put downward pressure on remodeling spending. However, recent federal cuts to incentives for efficiency improvements may spur short-term growth as homeowners make upgrades before benefits expire at the end of the year.
  • So far in 2025, small investors are playing an outsized role in the U.S. single-family housing market, according to The Wall Street Journal. In the first half of 2025, small investors accounted for about 25% of home purchases, outpacing large institutional buyers, according to property analytics firm Cotality. While traditional home buyers remain sidelined by high home prices and interest rates, small investors are capitalizing on seller incentives. Unlike large firms constrained by institutional reporting, smaller investors can take greater risks and are increasingly targeting mid-priced homes to renovate and rent. An uptick in the percentage of homes sold to small investors could boost demand for residential remodeling as investors buy and fix up homes for flipping or renting.
  • A budget reconciliation law signed by President Trump in July includes provisions that will prompt an early sunset of tax credits for several types of residential energy efficiency improvements. The Biden-era Inflation Reduction Act (IRA) incentivized homeowners to make energy efficiency upgrades, including electric heat pump HVAC systems, modern doors and windows, insulation, and other projects. The tax credits and rebates were set to be in place for 10 years, but the budget reconciliation law of 2025 ends the tax credits at the end of this year.
  • The NAHB/Westlake Royal Remodeling Market Index (RMI) reading for the second quarter of 2025 was 59, down four points from the first quarter, according to a July 2025 report by the National Association of Home Builders (NAHB). Any RMI reading over 50 indicates that most remodelers feel market conditions are good. In the second quarter, the Current Conditions Index portion of the RMI fell five points to 66 compared to Q1 2025. The Future Indicators Index component of the RMI declined by four points to 51. While the RMI remained solidly in positive territory in Q2 2025, the NAHB noted that high interest rates and waning consumer confidence continue to pose challenges to the remodeling industry.

Industry Revenue

Residential Remodelers


Industry Structure

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.

                          Industry Forecast

                          Industry Forecast
                          Residential Remodelers Industry Growth
                          Source: Vertical IQ and Inforum

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