Remodeling in 2026: Old Homes, Tight Labor and the Trust Gap

If you run a remodeling, roofing or kitchen and bath business, 2026 probably hasn't felt like a boom or a bust. It has felt like work: steady enough demand, slower decisions from customers, and costs that won't sit still.

The national numbers back that up. Remodeling is holding its ground while new construction and home sales struggle, but growth is slowing, and the firms doing well are the ones adjusting to a pickier, more cautious homeowner.

A market that's flat, not falling

The National Association of Home Builders' Remodeling Market Index (RMI), a quarterly survey of remodelers, came in at 62 for the third quarter of 2026, up one point from the second quarter. Any reading above 50 means more remodelers rate conditions as good than poor.

The details are more interesting than the headline:

Current conditions held at 70 for the third straight quarter.
Small projects (under $20,000) scored 73, moderate projects ($20,000 to $49,999) 71, and large projects ($50,000 and up) 66.
The forward-looking measures were softer: leads and inquiries at 53, and the backlog of jobs at 56.

NAHB Chief Economist Robert Dietz said the reading is consistent with the association's projection for remodeling "to remain stable in 2026 and grow slightly in 2027." He also noted that remodeling is gaining share of the overall construction market, because it is less affected by high interest rates than new home building.

Harvard's Joint Center for Housing Studies sees the same plateau. Its Leading Indicator of Remodeling Activity (LIRA), released in July 2026, projected that year-over-year growth in home improvement and repair spending would slow to 0.5% by the second quarter of 2027, with annual spending edging from $517 billion to $519 billion. Rachel Bogardus Drew, who directs the center's Remodeling Futures Program, said growth in remodeling permits and retail spending on building products has flattened.

Why home sales matter to remodelers

A big share of remodeling is triggered when a house changes hands: sellers fixing up before listing, and buyers making a place their own. That pipeline is thin right now. Existing-home sales ran at an annual pace of 3.99 million in September, according to the National Association of Realtors (NAR), and sellers in NAR's latest annual profile had owned their homes for a median of 11 years before selling, a record.

The Joint Center's managing director, Chris Herbert, put it simply: "Until home sales rebound from current low levels, remodeling expenditures are likely to stay at this pace."

The flip side is that owners who stay put still have houses that need work, and those houses are getting older.

Older homes, older owners

The median owner-occupied home in the US is now 42 years old, according to NAHB's analysis of the 2024 American Community Survey. NAHB calls housing age an important remodeling indicator, since older homes tend to be less energy efficient and more likely to need repairs, upgrades and renovations. Roofs, windows, siding, mechanical systems and forty-year-old kitchens don't wait for the housing market to recover.

The people in those homes are aging, too, and most want to stay. In AARP's 2024 Home and Community Preferences Survey, 75% of adults 50 and older said they want to remain in their current homes as they age, and 51% said they need a home that supports independent aging. Among those planning modifications, the most common were grab bars (72%), entryway improvements (71%) and kitchen upgrades (39%). And among those who expect to relocate, 60% cited the burden of property maintenance as a reason.

How contractors are responding

The strength in small and moderate projects lines up with this. Many firms are leaning into work that fits a cautious, long-tenure owner:

Repair and replacement jobs that can't be put off, done well and documented, which often lead to bigger projects later.
Accessibility work such as curbless showers, wider doorways, better lighting and safer entries, presented as comfort and convenience rather than as a medical necessity.
Phased plans that let a homeowner tackle a kitchen or bath in stages when a full remodel feels like too big a bet.

Labor and materials: the ongoing squeeze

Costs and crews remain the top operational headaches. In the Q3 RMI release, NAHB Remodelers Chair Elliott Pike said remodelers in parts of the country "continue to report issues with high material costs," and that economic uncertainty is making some customers hesitant to move forward.

On labor, Dietz pointed to shortages "exacerbated by immigration enforcement and competition from data center construction," which he said are lengthening project completion times. For a small firm, that shows up as longer waits for subs, harder hiring, and schedules that slip for reasons outside the owner's control.

Tariffs add another layer of uncertainty, especially for kitchen and bath work. Under the federal Section 232 action on wood products, imported kitchen cabinets and vanities have carried a 25% duty, and a proclamation published in January 2026 pushed a scheduled increase to 50% back to January 1, 2027. The increase won't apply to imports from countries that reach a trade agreement with the US, so the final picture is still in flux.

What steady firms are doing about costs

Putting clear validity windows on estimates, and explaining why, so a price quoted in spring isn't assumed to hold in fall.
Ordering long-lead items such as cabinets and windows as soon as a contract is signed.
Using allowances and written change-order processes so cost movements are visible rather than surprising.
Being honest about timelines up front. Homeowners tend to forgive a realistic schedule more readily than a missed optimistic one.

Homeowners want proof before they sign

Trust may be the biggest challenge of all. Home improvement has long been a target for fraud, and homeowners are warned about it constantly. The Federal Trade Commission's consumer guidance lists the red flags: contractors who knock on the door because they're "in the area," pressure for an immediate decision, demands for full payment up front or cash only, asking the homeowner to pull permits, and steering them to a particular lender.

The FTC's advice for homeowners reads almost like a checklist of what a reputable contractor should make easy to verify:

Hire only licensed and insured contractors, and confirm the license with state or local officials.
Get recommendations from people you trust, and search the company name with words like "scam" or "complaint."
Read online reviews with a critical eye.
Get several written estimates, and ask about big price differences.
Make sure the contract includes the license number, start and finish dates, any verbal promises and cancellation rights.
Don't pay everything up front, and shop around before agreeing to any financing.

Reviews themselves now carry federal rules. In 2024 the FTC finalized a rule banning fake reviews and testimonials, including AI-generated ones, paying for reviews conditioned on positive or negative sentiment, undisclosed reviews by company insiders, and suppressing negative reviews through threats or intimidation. The FTC can seek civil penalties against knowing violators.

Turning skepticism into an advantage

Contractors who answer these questions before the homeowner asks are standing out. That means showing license and insurance information openly, sharing photos of real completed jobs, writing detailed estimates, tying payments to milestones, and asking every customer for an honest review rather than only the happy ones. When financing is part of the conversation, letting homeowners compare options on their own builds more trust than pushing a single lender.

The bottom line

The remodeling market of 2026 isn't shrinking, but it isn't carrying anyone along either. Demand is anchored by an aging housing stock and owners who intend to stay. The pressure comes from costs, crews and cautious customers who do their homework. The firms that do well in this stretch tend to be the ones that are easy to check out, clear about prices and schedules, and consistent in how they follow up.

Where we fit

Much of that homework now happens online, before a homeowner ever calls. We build websites for contractors that put licensing, real project photos and reviews where people look for them, and our home improvement contractors page explains how. If you'd like to see what that looks like, you can click through sample sites at previews.yottadesign.com.

Sources

Ready to put this into action?

Schedule a Consultation