Residential Remodelers NAICS 236118

Nov 17, 2025 - Remodeling Establishments, Employment Rise

• Amid the aging US housing stock and many households unable to afford new homes, the number of establishments and employees in the remodeling industry has grown significantly, according to analysis of US Census Bureau data by the National Association of Homebuilders (NAHB). Between 2000 and the first quarter of 2025, the number of remodeling establishments has grown from 69,000 to more than 128,000. About 56% of all residential building construction (RBC) establishments are remodelers compared to about 39% in the mid-2000s. In 2004, remodeling accounted for nearly half of all RBC employment compared to just 30% in the mid-2000s. The NAHB suggests remodeling may grow further as some smaller single-family general contractors pivot to remodeling due to lower barriers to entry, fewer regulations, and lower upfront investment requirements.
• Several factors support steady growth in the North American residential improvements market, according to FMI’s fourth-quarter 2025 North American Engineering and Construction Outlook. Spending on residential remodeling is forecast to rise 2% in 2026 and 2027 before increasing by 4% in 2028 and 5% in 2029. The median age of an owner-occupied home is nearly 45 years, and repair and replacement of home systems is expected to outpace discretionary remodeling spending. As home values have risen, more homeowners are tapping the equity in their homes as a source of financing for repairs and upgrades. As of Q2 2025, home equity lines of credit (HELOC) balances were up 8% compared to the same period in 2024, according to the Federal Reserve's Household Debt and Credit Report. In their third-quarter reporting, Home Depot and Lowe's said Q3 professional contractor sales were stronger than DIY sales.

• On October 14, 2025, the US began adding a 25% levy on cabinets, vanities, and unupholstered furniture imports, and 10% tariffs on wood floors, lumber, and wood, according to The New York Times. Industry watchers say the new tariffs will significantly raise construction and renovation costs for U.S. homebuilders. With duties reaching up to 50% on some items by January, builders who rely on foreign materials warn of project delays and increased uncertainty. The National Association of Home Builders estimates that 7% of materials used in new residential construction are imported. Industry leaders fear the added costs will be passed on to consumers, making homeownership and renovations more expensive while slowing new home construction, deepening the housing shortage, and offsetting any relief from falling interest rates.
• The NAHB/Westlake Royal Remodeling Market Index (RMI) reading for the third quarter of 2025 was 60, up one point from the second quarter, according to an October 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 third quarter, the Current Conditions Index portion of the RMI rose two points to 68 compared to Q2 2025. The Future Indicators Index component of the RMI increased by one point to 52. While the RMI remained solidly in positive territory in Q2 2025, the NAHB noted that high labor and materials costs and waning consumer confidence continue to pose challenges to the remodeling industry. However, the aging of US housing stock and rising household net worth are supportive of remodeling spending.