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
Feb 17, 2025 - Builders Rank Top Headwinds for 2025
- Except for inflation, which some builders expect to improve this year, the challenges most builders foresee for 2025 are much the same as the ones they faced in 2024, according to a recent survey by the National Association of Home Builders (NAHB). More than three-quarters (78%) of builders said high interest rates will likely be the key problem they face in 2025, down from 91% in 2024. Other significant issues builders expect to face this year include buyers pausing purchases as they wait for interest rates and prices to drop (74% of respondents), cost and availability of developed lots (65%), building materials prices (64%), and cost and availability of labor (64%).
- North American residential improvement spending is forecast to rise 5% in 2025, according to FMI’s first-quarter 2025 North American Engineering and Construction Outlook. Residential remodeling spending in 2024 was driven by multifamily, single-family rentals, extreme weather events, and smaller contractors expanding to offer luxury improvements. FMI expects these trends to continue in 2025. Demand is also driven by record-high home values, aging housing stock, and homeowners opting to make improvements rather than move. Residential improvement spending is projected to slow to 2% growth in 2026, then rise 3% and 5% in 2027 and 2028, respectively.
- In January, Home Depot announced partnerships with Uber Eats and DoorDash that will enable customers to get select products delivered to their home or job site in as little as one hour. The move enhances Home Depot’s existing delivery options, including free next-day delivery and same day delivery via the company’s website, and through Instacart. The option of having selected items delivered through Uber Eats and DoorDash is served by more than 2,000 Home Depot locations.
- 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.
Get A Demo
Vertical IQ’s Industry Intelligence Platform
See for yourself why over 60,000 users trust Vertical IQ for their industry research and call preparation needs. Our easy-to-digest industry insights save call preparation time and help differentiate you from the competition.
Build valuable, lasting relationships by having smarter conversations -
check out Vertical IQ today.