The remodeling market is poised for growth in the coming years as many structural tailwinds, including an aging housing stock, the persistent lock-in effect and the trend for older homeowners to age-in-place, will not be changing quickly, according to industry experts at a panel hosted by the National Association of Home Builders (NAHB) during the International Builders’ Show in Orlando, Florida.
This positive outlook is reflected in the NAHB/Westlake Royal Remodeling Market Index (RMI), a quarterly survey of NAHB remodeler members that provides insight for the remodeling industry. In fact, the RMI has registered a reading above the break-even point of 50 for 24 consecutive quarters, showcasing a post-pandemic resiliency. The remodeling sector is also outpacing the single-family and multifamily housing markets when comparing their respective sentiment measurements over the past five years.
“There are many factors contributing to the continued growth of the remodeling market, including the aging housing stock,” said Eric Lynch, economist for NAHB. “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 homeowners are able to finance remodeling projects that align with their needs.”
Another tailwind for the remodeling market is the mortgage rate lock-in effect, where homeowners with low mortgage rates have chosen to stay in their current homes instead of moving and taking on a higher rate. Lynch noted that while the lock-in effect is lessening, it is still persisting which means households will be incentivized to pursue remodeling projects first before considering a sale.
Lynch explained that the remodeling sector is continuing to become a larger share of the residential construction market, especially when looking at the number of firms and overall construction spending. There were 128,000 remodeling firms at the start of 2025, up from 69,000 in 2000. And home improvement spending share increased from 33 percent in 2007 to 44 percent in the first quarter of 2025.
Looking ahead, residential remodeling activity is expected to increase 3 percent in 2026 and an additional 2 percent 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.