Tile and Terrazzo Contractors NAICS 238340

Nov 7, 2025 - Residential Remodeling Activity to Remain Steady

• Home remodeling spending is expected to remain stable for the rest of this year and through mid-2026, according to the Leading Indicator of Remodeling Activity (LIRA) report released in October by the Joint Center for Housing Studies at Harvard. Homeowner improvements and repairs are expected to increase 1.9% to $511 billion in the fourth quarter of 2025, compared to Q4 2024. In the first quarter of 2026, remodeling spending will reach $524 billion, up 2.4% from Q1 2025. Spending will then moderate to $519 billion in Q2 2026, up 2.1% from Q2 2025. In the third quarter of 2026, year-over-year spending is forecast to rise 1.9% to $517 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 economic uncertainty.
• Home builder confidence in the single-family market improved in October but remained solidly in negative territory, according to the National Association of Home Builders (NAHB). Home builder sentiment, as measured by the NAHB/Wells Fargo Housing Market Index (HMI), rose five points to 37 in October 2025 compared to September's reading of 32. Any HMI reading over 50 indicates that more builders see conditions as good than poor. October's HMI marked the highest reading since April 2025. Builders are cautiously optimistic as the average for a 30-year fixed-rate mortgage dropped to 6.3%, and the Federal Reserve is expected to ease interest rates further later in the year. However, the housing market remains challenging as many would-be buyers stay on the sidelines waiting for lower mortgage rates.

• North American construction and engineering spending for residential projects in 2026 is expected to rise 1% after decreasing an estimated 3% in 2025, according to FMI’s fourth-quarter 2025 North American Engineering and Construction Outlook. Multifamily construction is expected to decrease by 2% in 2026, amid oversupply in some key markets and weak rent growth. Spending for Multifamily projects is forecast to drop 1% in 2027 before rising 5% in 2027, 8% in 2028, and 9% in 2029. Single-family construction is projected to rise 1% in 2026, as stubbornly high interest rates and elevated home prices reduce demand. However, single-family spending is projected to improve gradually, rising 2% in 2027, 4% in 2028, and 5% in 2029. Commercial construction spending is forecast to decline by 4% in 2026 as retail store closures surpass openings for the first time in a decade and warehouse vacancies remain high.
• Nearly a third of US construction firms have been impacted by intensified immigration enforcement in the last six months, according to a recent report by the Associated General Contractors of America (AGC) and the National Center for Construction Education and Research (NCCER). More stringent enforcement has slowed project delivery and left 88% of firms with craft worker vacancies. One-fifth of construction firms surveyed reported that subcontractors had lost workers, 10% reported increases in absenteeism due to actual or rumored enforcement actions, and 5% said jobsites had been visited by immigration agents. Only 10% of firms use visa programs like H-2B due to approval challenges, leaving many vulnerable to enforcement actions. Industry leaders are urging Congress to increase funding for career and technical education and to create a construction-specific visa program to stabilize the workforce and support long-term growth.