Residential Remodelers NAICS 236118

Feb 19, 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.

• North American construction and engineering spending on residential improvements in 2026 is expected to grow by 3% after increasing an estimated 6% in 2025, according to FMI’s first-quarter 2026 North American Engineering and Construction Outlook. In their late-2025 reporting, Home Depot and Lowe's noted there are signs that homeowners are pulling back on big-ticket, discretionary projects, including kitchens and baths. The median age of owner-occupied homes in the US is 45 years, which should support replacement cycles for critical systems, including HVAC, roofs, plumbing, and building envelopes. However, the One Big Beautiful Bill Act sunset homeowner tax credits for energy-efficiency upgrades at the end of 2025, which likely pulled forward some credit-related spending. In 2027, residential improvement spending growth will stay flat at 3%, then rise to 4% in 2028 and 5% in 2029.
• Sales of existing US homes decreased by 8.4% in January 2026 from December and were down 4.4% year-over-year, according to the National Association of Realtors (NAR). NAR chief economist Lawrence Yun said, "The decrease in sales is disappointing. The below-normal temperatures and above-normal precipitation this January make it harder than usual to assess the underlying driver of the decrease and determine if this month’s numbers are an aberration. Affordability conditions are improving, with NAR’s Housing Affordability Index showing that housing is the most affordable it’s been since March 2022. This is due to wage gains outpacing home price growth and mortgage rates being lower than a year ago. However, supply has not kept pace and remains quite low." Existing home sales are a key driver of remodeling activity, as sellers typically make repairs before listing their homes and buyers often make renovations before moving in.