The U.S. housing market is seeing a long-term shift toward remodeling as aging homes and high new-home prices make renovation the more practical option for many Americans. According to NAHB’s analysis of employment and establishment data, remodeling is no longer a short-term trend but a structural transformation in residential construction. The number of remodeling firms nearly doubled from under 69,000 in 2000 to over 128,000 in early 2025, now representing 56% of all residential building construction businesses. This growth reflects steady consumer demand for affordable improvements and builders’ strategic pivot toward renovation to sustain business amid fluctuating housing conditions and rising mortgage rates.
Employment patterns mirror this rise in remodeling activity. Nearly half of all residential construction workers are now employed by remodeling firms—up from just 30% two decades ago. Smaller remodeling firms, typically with three to four employees, dominate the sector, driven by lower entry barriers and flexible operations. Many former home builders have shifted focus to remodeling to remain viable in a tighter housing market. With renovation proving less vulnerable to market downturns and requiring fewer upfront investments, remodeling has become the core growth engine of the residential construction industry, creating more jobs and signaling a redefined future for homebuilding in the U.S.
