Painting & Wall Covering Contractors NAICS 238320

Mar 18, 2026 - Remodeling Spending to Soften in 2026

• 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.
• Bathrooms were the most common type of remodeling project in 2025, according to a recent survey of residential remodelers by the National Association of Home Builders (NAHB). The NAHB asked remodelers to rank 22 types of projects on a scale of 1 to 5, where 1 = not common and 5 = very common. Bathrooms emerged as the most common project type with 73% of survey respondents ranking them either a 4 or a 5 - "common" or "very common," respectively. Kitchen remodeling ranked second among project types, with 69% of remodelers rating it as common or very common. Whole-house remodeling was the third most popular project type, with 55% of those surveyed ranking it as either common or very common.

• Single-family housing starts fell 2.8% month over month and 6.5% year over year in January. The Census Bureau report was delayed by the government shutdown late last year. The number of building permits issued for single-family, privately-owned housing units fell 0.9% month-over-month and dropped 11.6% year-over-year in January 2026. Homebuilders have faced several headwinds, including tariffs that have increased the cost of key inputs like lumber and cabinets, and labor shortages, according to Reuters. While interest rates have fallen in 2026, the US war with Iran is pushing oil prices higher, along with US Treasury yields. Mortgage rates could begin to rise again because they are tied to the benchmark 10-year Treasury yield.
• Home builder confidence in the single-family market rose slightly in March, but builders remain concerned about housing affordability, higher construction costs, and shortages of buildable lots and labor, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), rose one point to 38 in March 2026. Any HMI reading over 50 indicates that more builders see conditions as good than poor. The HMI survey also showed that 37% of builders reduced home prices in March to lure potential buyers off the sidelines, although the average price reduction of 6% remained unchanged from February. While the war in Iran and resulting higher oil prices could pose additional challenges, recent executive orders by President Trump aimed at reducing regulatory hurdles to homebuilding are seen as a positive step.