Residential Remodelers
Industry Profile Report
Dive Deep into the industry with a 25+ page industry report (pdf format) including the following chapters
Industry Overview Current Conditions, Industry Structure, How Firms Operate, Industry Trends, Credit Underwriting & Risks, and Industry Forecast.
Call Preparation Call Prep Questions, Industry Terms, and Weblinks.
Financial Insights Working Capital, Capital Financing, Business Valuation, and Financial Benchmarks.
Industry Profile Excerpts
Industry Overview
The 127,400 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.
Industry size & Structure
A typical residential remodeling firm employs three workers and generates about $604,000 annually.
- There are more than 127,400 residential remodelers in the US employing nearly 445,000 workers and generating over $77 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 8% of the industry’s revenue.
- Residential remodeling spending reached about $480 billion in 2023, but is expected to moderate to $450 billion in 2024, according to Harvard’s Joint Center for Housing Studies.
Industry Forecast
Residential Remodelers Industry Growth
Recent Developments
Mar 17, 2025 - Homeowners Pull Back on Remodeling Amid Tariff Jitters
- Tariffs, deportations, and high interest rates are giving some homeowners second thoughts about new home improvement projects, according to the Financial Times. In January, pending home sales hit an all-time low, according to The National Association of Realtors. Pending homes sales are an indicator of remodeling demand as homeowners often fix up homes before putting them on the market and buyers make improvements before moving in. In a recent earnings call, Home Depot’s CEO said that while the US’s aging housing stock is supportive of home improvement spending, an uptick in 2025 isn’t a given. The Trump administration’s deportation activities may also contribute to workforce instability for the construction sector, which may give some homeowners pause about starting major improvement projects.
- Trade strife may increase lumber prices, which could pinch remodeler margins if higher input costs can’t be passed on to clients. On March 1, Trump initiated an investigation into whether US imports of Canadian lumber posed a national security threat, according to The New York Times. The inquiry could enable Trump to enact fresh tariffs on lumber imports from Canada on top of a 25% tariff on all Canadian imports that went into effect on March 4 but was paused for a month two days later for products that are compliant with the United States-Mexico-Canada Agreement (USMCA). The White House claims the US has the resources to be self-sufficient in its lumber needs, but US sawmills can’t compete with imports dumped unfairly on the US market. White House officials said lumber supply is a national security issue because the US military is a significant lumber consumer.
- Raids by Immigration and Customs Enforcement (ICE) are prompting some foreign-born workers to stay home from their workplaces, disrupting key industries that rely on migrant workforces, including construction, according to The Wall Street Journal. The Trump administration has said that while it is focusing on undocumented people with criminal backgrounds, anyone in the country illegally faces increased risk. According to an analysis of US Census Bureau data by the American Immigration Council, undocumented immigrants make up about 14% of the US construction sector’s workforce. The Associated General Contractors of America said it had received anecdotal reports of rising absenteeism from member firms in several locations, including Florida, Georgia, Oklahoma, and Texas. Labor disruptions reduce construction firms’ ability to deliver projects on time.
- Home remodeling spending is expected to see slight gains in 2025 after two years of weakening expenditures, according to the Leading Indicator of Remodeling Activity (LIRA) report released in January by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase 0.4% to $513 billion in the first quarter of 2025 compared to Q1 2024. In the second quarter of 2025, remodeling spending will rise quarter-over-quarter to $505 billion, up 0.7% from Q2 2024. Spending will then increase to $506 billion in Q3 2025, up 1.2% from Q3 2024. In the fourth quarter of 2025, year-over-year spending is forecast to rise 1.2% to $509 billion. Joint Center expects improvements will be supported by rising home values, a steady labor market, and gradually improving sales of existing homes. Better retail sales of building materials and solid remodeling permitting activity should also support home improvement spending.
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