In a significant shift across the U.S. housing sector, residential remodelers have now firmly outpaced home builders, underscoring a transformation in how Americans approach homeownership and investment in their living spaces. By the end of 2025, there were 128,187 residential remodeling establishments operating nationwide—about 65 percent more than the combined total of single-family and multifamily builders. This divergence marks a notable evolution in housing dynamics, with more Americans choosing to renovate existing homes rather than embark on the costlier path of new construction.
The data, compiled by the U.S. Census Bureau and analyzed by housing economists, reveals more than just a numbers game. It reflects deeper shifts in affordability, generational preferences, aging housing stock, and economic constraints that are reshaping the home improvement and construction industries. Homeowners and buyers alike are facing continued financial headwinds in the new-build market, including elevated mortgage rates, high land prices, labor shortages, and surging material costs. In contrast, remodeling offers a more flexible and, in many cases, a more affordable alternative to achieve desired living conditions without the need to move or break ground on new property.
This remodeling boom has also created ripple effects across the real estate profession. Realtors increasingly report that buyers are prioritizing homes with strong “remodeling potential,” and many agents are adapting by learning to guide clients through the renovation process. This includes offering insights into estimated remodeling costs, permitting requirements, and referrals to trusted contractors or designers. The result is a growing hybrid role for real estate professionals who now blend traditional buying and selling with renovation advising—a response to client demands for properties that can be customized and improved rather than replaced.
The aging condition of America’s housing stock is a key factor driving this transformation. Nearly half of the country’s owner-occupied homes were built before 1980. These homes often require upgrades not just for aesthetics, but for structural integrity, energy efficiency, and modern functionality. With median home prices remaining historically high, especially in urban and suburban markets, the decision to stay and improve rather than sell and rebuild is becoming increasingly logical. For many homeowners, remodeling is not merely a matter of preference—it is an economic necessity.
In addition, demographic trends are influencing the rise in renovation activity. Baby boomers, many of whom are choosing to age in place rather than relocate, are investing in home modifications to improve accessibility and comfort. At the same time, millennials entering mid-life are prioritizing personalization, often purchasing older homes and transforming them to suit their lifestyles. The popularity of home improvement content on social media platforms and streaming services has further fueled interest in do-it-yourself upgrades and inspired homeowners to take on remodeling projects that once seemed daunting or out of reach.
Construction trends over the past decade also offer insight into the growing gap between remodelers and builders. While remodeling establishments have grown at a steady pace of roughly 25 percent since 2017, the number of builder establishments has increased by only 12 percent in the same period. Many home builders have struggled with volatile costs for materials like lumber, steel, and concrete, as well as delays in securing permits and approvals. Labor shortages, particularly in skilled trades, continue to constrain the pace of new home construction, making remodeling a more viable option for consumers looking for faster, more controlled timelines.
Even with the growth of remodeling firms, there are concerns about sustainability and equity. As demand for renovation services rises, some worry about gentrification in certain urban neighborhoods, where aggressive remodeling can lead to rising property values and displacement of long-time residents. Industry experts note that while remodeling has clear economic and environmental benefits—such as reusing existing structures and reducing sprawl—it also requires thoughtful regulation and community engagement to ensure equitable outcomes.
Meanwhile, home improvement professionals are expanding their services to meet evolving client needs. Many remodeling companies now offer end-to-end solutions that include design consultations, energy-efficient upgrades, and digital project tracking tools that allow homeowners to stay connected throughout the construction process. Some firms are specializing in niche areas such as aging-in-place renovations, eco-friendly materials, or disaster-resistant retrofits in response to climate-related events.
Looking ahead, analysts predict that while overall renovation spending may cool slightly if the broader economy slows or interest rates rise further, the long-term trajectory still favors the remodeling sector. The underlying drivers—aging housing stock, homeowner preferences, and persistent cost barriers in the new-build market—remain deeply embedded in the current economic environment. As such, remodelers are poised to play a central role in how Americans live and invest in their homes over the next decade.
For real estate professionals, adapting to this landscape means embracing the tools and knowledge required to navigate a renovation-centric market. Those who can bridge the gap between buying, selling, and remodeling will be better equipped to guide clients through complex decisions and deliver added value in a competitive housing market. The remodeling boom is more than a trend—it’s a redefinition of the American homeownership journey in the 21st century.
