While 50% of U.S. homeowners are planning home renovations in 2026, this marks a decrease from the previous year, according to Kitchen & Bath Design News. This reduction in activity occurs even as high-end projects continue to surge past $150,000.
Many homeowners are pulling back on renovation plans and median spending. Yet, the overall market is still projected to grow. High-end projects thrive despite general economic concerns. Homeowners hesitate to undertake large expenses like remodels due to economic worries, states Realtor.
The residential remodeling market is likely entering a period of slower, more selective growth. This favors substantial, long-term investments in current properties over broad-based activity. Homeowners consider renovations instead of selling in 2026.
The 'Forever Home' Imperative
Nearly two-thirds of homeowners, 61%, plan to stay in their homes for 11 years or more, according to Kitchen & Bath Design News. This commitment to long-term residency means homeowners are less likely to invest in superficial updates. Instead, they seek foundational changes that enhance livability and property value for decades.
Affluent Homeowners Drive Market Growth
High-end projects, those in the top 10%, reached $150,000 or more in 2025. This signifies a focus on substantial, high-value renovations. The 'forever home' phenomenon acts as a catalyst for these investments, not just a reason to stay put.
The residential remodeling market is not contracting. Instead, it concentrates wealth. A shrinking pool of affluent homeowners, committed to their 'forever homes,' are now the primary drivers of market growth through high-value projects. This leaves mid-tier contractors to scramble for fewer, less profitable jobs, according to Kitchen & Bath Design News and Realtor. The market's growth now hinges on a select few, rather than broad participation.
Economic Uncertainty Shapes Renovation Choices
Economic concerns create a two-tiered renovation market. General homeowners hesitate to undertake large expenses. Those investing in 'forever homes' appear more insulated. This reveals a widening gap in renovation capacity and confidence across income brackets.
Average homeowners are delaying or downsizing renovations due to economic uncertainty. This pushes the industry to cater to the booming high-end segment. It also requires innovation to make smaller, essential repairs more accessible and affordable, as noted by Realtor and Kitchen & Bath Design News.
The market must adapt to this new reality. Contractors who can offer flexible, value-driven solutions for essential repairs, alongside luxury services, will gain an edge.
A Nuanced Outlook for Remodeling Growth
Total spending on improvement and repair is projected to edge up slightly to $523 billion in early 2027, according to Realtor. However, annual growth in spending on home improvement and repair for owner-occupied homes will slow to 0.5% by early 2027. This suggests a market where overall volume increases marginally, but the pace of individual spending slows significantly. Homeowners are spending more in total, but each dollar stretches further, or fewer homeowners are spending big.
Residential remodeling activity is expected to increase 3% in 2026 and an additional 2% in 2027 in inflation-adjusted terms, states NAHB. This divergence between nominal spending growth and real activity suggests that while more work might occur, the actual financial gains for the market could be smaller due to inflation.
The remodeling market appears poised for sustained growth, particularly in the high-end sector, if economic stability encourages long-term 'forever home' investments over short-term upgrades.
