Residential Remodelers NAICS 236118

Jun 16, 2025 - Economic Uncertainty May Reduce Aging-in-Place Remodeling Spending

• According to the National Association of Home Builders (NAHB) Q1 2025 Remodeling Market Index (RMI) survey, only 56% of remodelers do work that helps homeowners age-in-place (AIP). The Q1 2025 results marked the lowest percentage of remodelers who do AIP work since the NAHB began asking AIP-related questions as part of the RMI in 2004. The NAHB suggests the drop in AIP remodeling work may be a result of increased economic uncertainty and high interest rates. Among respondents to the Q1 RMI survey who did AIP work in the previous 12 months, 87% reported installing grab bars. Other popular types of AIP remodeling projects included curb-less showers (78% of remodelers), higher toilets (71%), widening doorways (52%), and ramps or lower thresholds (44%). Long-term demand for AIP work is expected to remain strong amid the aging of the US population and housing stocks.
• Home prices may begin to move lower as sellers outnumber buyers in the US existing home market, according to a recent report by Redfin. There are 34% more sellers than buyers, giving those shopping for a home more leverage to negotiate on price. The current number of homes on the market is the highest since March 2020. Except for April 2020, when the onset of the pandemic virtually shut down the US housing market, there have not been so few sellers since 2013. Given the imbalance between sellers and buyers, Redfin estimates that home prices will drop 1% by the end of 2025. Many homeowners have been reluctant to sell because they secured a low mortgage rate before interest rates began rising in 2022. However, some homeowners with low rates are starting to list their homes due to life changes such as new jobs, growing families, return-to-work mandates, and divorce. An upturn in the existing home market could boost remodeling spending as sellers usually spruce up before putting homes on the market, and buyers make improvements before moving in.

• Home remodeling spending is expected to see slight gains through 2026 after two years of weakening expenditures, according to the Leading Indicator of Remodeling Activity (LIRA) report released in April by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase 0.8% to $505 billion in the second quarter of 2025 compared to Q2 2024. In the third quarter of 2025, remodeling spending will rise to $506 billion, up 1.4% from Q3 2024. Spending will then increase to $512 billion in Q4 2025, up 1.8% from Q4 2024. In the first quarter of 2026, year-over-year spending is forecast to rise 2.8% to a record $526 billion. Joint Center expects improvements to be supported by increasing home values, a steady labor market, and gradually improving existing home sales. However, uncertainty stemming from trade strife and waning consumer confidence could put downward pressure on remodeling demand.
• The continued rise in the median age of US housing stocks may present opportunities for residential remodelers. In an April report, National Association of Home Builders analysis of US Census Bureau data showed that nearly half of owner-occupied homes were built before 1980. In 2023, the median age of owner-occupied homes reached 41 years, up from 31 years in 2005. Median home age has increased since the Great Recession when new housing production dropped dramatically. Since then, home building activity has not kept pace with demand. US homes require more maintenance and repairs as they age, driving remodeling spending. The lock-in effect of low mortgage rates during the pandemic is also prompting homeowners to renovate rather than move and face a higher interest rate.