Remodeling Market Positioned for Multi-Year Growth as Aging Housing Stock Drives Demand

ORLANDO, FL — The residential remodeling market is expected to post steady gains over the next several years, supported by structural factors that continue to favor renovation over relocation, according to experts at a panel hosted by the National Association of Home Builders during the International Builders’ Show.

For remodelers, the outlook signals continued opportunity in core project categories such as kitchens, baths and whole-house renovations—particularly as homeowners choose to reinvest in existing properties rather than enter a higher-rate housing market.

Remodeling Sentiment Outpaces Other Housing Sectors

The NAHB/Westlake Royal Remodeling Market Index (RMI), a quarterly survey of NAHB remodeler members, has remained above the break-even point of 50 for 24 consecutive quarters, reflecting post-pandemic resiliency.

Compared with single-family and multifamily construction sentiment over the past five years, remodeling has shown stronger and more consistent performance. That stability is translating into a growing share of residential construction activity.

“There are many factors contributing to the continued growth of the remodeling market, including the aging housing stock,” said NAHB Economist Eric Lynch. “The typical age of a home has increased from 31 years old in 2006 to 41 years old in 2023. And with the dramatic rise in home equity post-pandemic, more home owners are able to finance remodeling projects that align with their needs.”

Aging Housing Stock and Equity Gains Fuel Projects

As the nation’s housing stock continues to age, more homes require system upgrades, layout changes and full-scale renovations. At the same time, higher home equity levels are giving homeowners additional borrowing power to fund improvements.

For professional remodelers, that combination is sustaining demand for high-value projects—particularly in older homes requiring code upgrades, accessibility modifications and energy-efficiency improvements.

Mortgage Rate Lock-In Keeps Homeowners in Place

The mortgage rate lock-in effect remains another key driver. Homeowners with low mortgage rates are less inclined to move and assume higher financing costs. Instead, many are opting to remodel.

Lynch noted that while the lock-in effect is easing slightly, it continues to incentivize homeowners to upgrade their current residences before considering a sale—extending the runway for remodeling firms.

The sector’s expansion is evident in firm growth and spending share. The number of remodeling firms increased from 69,000 in 2000 to 128,000 at the start of 2025. During the same period, home improvement’s share of residential construction spending rose from 33% in 2007 to 44% in the first quarter of 2025.

Aging-in-Place Work Continues to Expand

Demand for aging-in-place modifications remains a strong contributor to remodeling growth. According to RMI survey results:

• 56% of remodelers are involved in aging-in-place home modification work.

• 96% report that most or some clients are familiar with the aging-in-place concept.

• 73% say requests for aging-in-place features have increased significantly or somewhat over the past five years.

These projects often include bathroom accessibility upgrades, wider doorways, first-floor living conversions and other modifications designed to allow homeowners to remain safely in their homes long term.

Core Project Types Remain Consistent

A recent RMI survey found that the most common remodeling projects in 2025 are:

• Bathroom remodels

• Kitchen remodels

• Whole-house remodels

These categories have historically ranked as the top three project types undertaken by NAHB remodelers, underscoring stable demand in high-value renovation segments.

Looking ahead, NAHB forecasts residential remodeling activity will increase 3% in 2026 and an additional 2% in 2027 in inflation-adjusted terms.

“NAHB is forecasting growth for the remodeling sector both in the short-term and the long run, driven by these structural tailwinds that are not expected to change in the near future,” said Lynch.

Benchmarking and KPIs Critical for Profitable Growth

Beyond market fundamentals, panelists emphasized the importance of financial discipline and performance tracking.

Attendees heard from Alan Hanbury, Jr., CGR, CAPS, GMR, President and CEO of Consulting by House of Hanbury Builders Inc., Newington, Conn., who outlined best practices for setting key performance indicators (KPIs) to improve profitability and long-term stability.

For remodelers, benchmarking against industry peers can help identify operational gaps and set realistic growth targets.

“It is extremely important for remodelers to establish benchmarks and target attainable future goals if they want to continue to succeed and grow,” said Hanbury. “It is even better when those objectives are based on data from your fellow peers.”

NAHB’s Remodelers’ Cost of Doing Business Study allows firms to compare gross and net profit, assets and liabilities, owners’ equity and financial ratios against top-performing, average and lower-performing remodelers, segmented by firm type and revenue level.

“Every remodeling business is unique, so understanding the differences among various groups of remodelers is crucial for making the most appropriate benchmarks for your company,” said Hanbury. “It is also essential to know the most important financial ratios used for benchmarking and how they are calculated so your comparisons are legitimate.”