NAHB Finds Aging Housing Stock Drives Residential Remodeling Demand
Key Highlights
- The remodeling market has remained above a break-even index for 24 consecutive quarters, indicating sustained industry health.
- Homeowners are increasingly investing in aging-in-place modifications, with 56% of remodelers involved in such projects in 2025.
- Remodeling is capturing a larger share of residential construction, accounting for 44% of spending in early 2025.
- Projections suggest a 3% increase in remodeling activity in 2026, supported by structural market drivers unlikely to shift soon.
ORLANDO, Florida — Residential remodeling growth is expected to continue in 2026 and beyond, according to the National Association of Home Builders.
Speaking during the International Builders’ Show in Orlando, industry experts said structural factors such as an aging housing stock, the mortgage rate lock-in effect, and demand for aging-in-place modifications are supporting the remodeling market.
The NAHB/Westlake Royal Remodeling Market Index, a quarterly survey of NAHB remodeler members, has remained above the break-even level of 50 for 24 consecutive quarters. Over the past five years, remodeling sentiment has outpaced both single-family and multifamily housing markets.
“There are many factors contributing to the continued growth of the remodeling market, including the aging housing stock,” said NAHB Economist Eric Lynch. He noted that the typical home age increased from 31 years in 2006 to 41 years in 2023. Lynch also pointed to rising home equity since the pandemic, which has enabled more homeowners to finance renovation projects.
The mortgage rate lock-in effect remains another driver. While the impact has begun to ease, many homeowners with low mortgage rates continue to delay moving, choosing instead to invest in remodeling before considering a sale.
Remodeling is also taking a larger share of the residential construction market. There were 128,000 remodeling firms at the start of 2025, compared to 69,000 in 2000. Home improvement spending represented 44% of residential construction in the first quarter of 2025, up from 33% in 2007.
Demand for aging-in-place work remains strong. The Remodeling Market Index survey found that 56% of remodelers are involved in home modifications related to aging-in-place. In addition, 96% reported that most or some clients are familiar with the concept, and 73% said requests for aging-in-place features have increased significantly or somewhat over the past five years.
The most common remodeling projects in 2025 were bathroom remodels, kitchen remodels, and whole-house renovations, consistent with historical trends reported by NAHB.
Looking ahead, NAHB forecasts residential remodeling activity to increase 3% in 2026 and an additional 2% in 2027, adjusted for inflation. According to Lynch, these projections reflect structural drivers that are not expected to shift in the near term.
At the event, Alan Hanbury, Jr., CGR, CAPS, GMR, president and CEO of Consulting by House of Hanbury Builders Inc. in Newington, Connecticut, discussed best practices for establishing key performance indicators. He emphasized the importance of benchmarking performance using peer data, including NAHB’s Remodelers’ Cost of Doing Business Study, which outlines financial metrics such as gross and net profit, assets, liabilities, owners’ equity, and financial ratios across firm types and revenue levels.
Hanbury said that understanding financial ratios and differences among remodeling business models is essential for setting appropriate benchmarks and supporting long-term growth.
For HVAC contractors, sustained residential remodeling growth signals steady retrofit and replacement opportunities tied to kitchen, bathroom, and whole-house renovations. As homeowners invest in aging housing stock and aging-in-place upgrades, contractors can expect increased demand for system replacements, ventilation improvements, indoor air quality enhancements, and energy-efficiency upgrades integrated into broader remodel projects.
The persistence of the mortgage rate lock-in effect also means more homeowners are choosing to improve comfort and performance in their existing homes rather than move, creating opportunities for HVAC contractors to position high-efficiency equipment, smart controls, and electrification solutions as part of long-term home improvement strategies that drive revenue growth and strengthen customer relationships.
Note: This piece was created with the help of generative AI tools and edited by our content team for clarity and accuracy.