Interior Design Services NAICS 541410

Mar 23, 2026 - Millennials Drive Remodeling Spending

• The New York Times reports that Americans are expected to spend a record $522 billion on home renovations in 2026, driven by high mortgage rates, aging housing stock, and shifting homeowner preferences, according to the Harvard Joint Center for Housing Studies. Elevated borrowing costs are prompting many homeowners to stay in place and invest in upgrades rather than move, while multigenerational living is increasing demand for modifications. Younger homeowners are playing a growing role, with millennials spending about $14,199 per household on improvements, the highest among generations, according to Angi. In a recent survey by online renovations platform Houzz. 41% of homeowners renovate due to dissatisfaction with existing styles, reflecting a focus on personalization. Industry data indicates functional upgrades, such as exterior repairs and system replacements, often deliver the highest returns, though lifestyle-driven renovations continue to gain popularity.
• Home improvement loan activity remains elevated compared with pre-pandemic levels, though demand has cooled from its 2022 peak, according to NAHB analysis of recently released Home Mortgage Disclosure Act (HMDA) data. Applications rose from 1.15 million in 2019 to 1.49 million in 2022, then declined to 1.20 million in 2024, reflecting moderating renovation activity amid higher interest rates. At the same time, the borrower profile is shifting older. Applicants age 65 and older increased their share from 17.8% in 2019 to 18.6% in 2024, driven in part by aging-in-place renovations and long-term homeownership. Younger cohorts also posted modest gains, including those ages 35 to 44, whose share rose to 22.9%. The data suggest sustained remodeling demand, supported by limited housing inventory and aging homes, even as overall loan activity stabilizes below recent highs.

• Sales of existing US homes increased by 1.7% in February 2026 from January but were down 1.4% year-over-year, according to the National Association of Realtors (NAR). NAR chief economist Lawrence Yun said, "Housing affordability is improving, and consumers are responding. Still, there is a long way to go to return to pre-pandemic levels of transaction activity. There are more than 6 million more jobs than in 2019, yet home sales per year are down by one million. Despite the modest gain in home sales, actual housing demand remains muted relative to wage growth and job gains. Wage growth is now outpacing home price growth by almost four percentage points. Mortgage rates are also measurably lower compared to a year ago." Existing home sales are a key driver of interior design services, as sellers may seek home staging help before listing their homes, and buyers often make design changes before moving in.
• Home remodeling spending growth is expected to moderate in 2026, according to the Leading Indicator of Remodeling Activity (LIRA) report released in January by the Joint Center for Housing Studies at Harvard. Homeowner spending on improvements and repairs is expected to increase 2.9% to $527 billion in the first quarter of 2026, compared to Q1 2025. In the second quarter of 2026, remodeling spending will trend downward to $518 billion but still be up 2.1% from Q2 2025. Spending will then moderate further to $517 billion in Q3 2026, up 2% from Q3 2025. In the fourth quarter of 2026, year-over-year spending is forecast to rise 1.6% to $522 billion. While solid remodeling permitting activity and gradually improving single-family home sales will support remodeling activity, potential headwinds include continued weakness of housing starts and elevated interest rates.