Top Trends Impacting the 2025-2029 Home Improvement Market Forecast

The five-year fore­cast antic­i­pates near-flat real growth in 2025, with a mod­est real rebound from 2026 to 2029 as infla­tion cools and nom­i­nal growth out­paces real growth. The pro­fes­sion­al (Pro) chan­nel will lead growth through 2025, after which con­sumer gains will broad­en as DIY projects and needs-based replace­ments sus­tain activ­i­ty. In the near term, region­al momen­tum favors the Pacif­ic, but growth is expect­ed to nor­mal­ize across regions lat­er. Both con­sumer and Pro seg­ments are pro­ject­ed to expand under var­i­ous sce­nar­ios, though the growth tra­jec­to­ry will dif­fer depend­ing on broad­er eco­nom­ic con­di­tions. Quar­ter­ly mod­el read­ings sug­gest that year-over-year cat­e­go­ry spend­ing will bot­tom out at around 0.2% in Q4 before re-accel­er­at­ing towards his­tor­i­cal aver­ages, sup­port­ed by pos­i­tive GDP.

3 Core Home Improvement Forecast Drivers to Watch

1. Inflation and Rates: 

CPI has eased from its peak, and infla­tion is mod­er­at­ing, enabling the Fed to begin inter­est rate cuts as con­di­tions allow. Although mort­gage rates are edg­ing down slight­ly, afford­abil­i­ty remains strained, keep­ing pres­sure on dis­cre­tionary projects.

2. Household Fundamentals: 

Real dis­pos­able income is expect­ed to improve into 2026 as sav­ings return to pre-pan­dem­ic lev­els. Con­sumer sen­ti­ment, which hit a low in Q3, is pro­ject­ed to recov­er as infla­tion cools and incomes sta­bi­lize, sup­port­ing an upturn in 2026.

3. Housing Market Mechanics: 

Exist­ing home sales are fore­cast­ed to climb, and hous­ing starts are expect­ed to hold steady. Home prices may dip before rebound­ing, which could shift activ­i­ties from main­te­nance-only to selec­tive improve­ments as afford­abil­i­ty sta­bi­lizes. Turnover will con­tin­ue to lim­it big-tick­et remod­els in the near term.

Homeowners Remain Active but Value-Focused

Accord­ing to HIRI’s Q2 2025 Home­own­er Project Track­er, home­own­ers stayed engaged but dis­ci­plined, pri­or­i­tiz­ing main­te­nance and small­er refresh­es over large dis­cre­tionary remod­els. Home­own­er spend has con­tin­ued to soft­en while work com­plet­ed has shift­ed to more DIY. Project plan­ning reached a five-quar­ter high, with eight in ten home­own­ers plan­ning activ­i­ty for the next quar­ter, though some plans are lighter on mate­r­i­al intensity.

Key Observations:

• Main­te­nance and quick wins lead, while big ren­o­va­tions are selective.
• DIY hours and par­tic­i­pa­tion return to trend.
• Exte­ri­or and enve­lope cat­e­gories strength­en seasonally.
• High­er self-pur­chas­ing and high­er sat­is­fac­tion with pros.
• Intent is broad, but spend expec­ta­tions are cau­tious over 12 months.

Contractor Sentiment Shows Cautious Optimism Amid Constraints

HIRI’s Q2 2025 Con­trac­tor Busi­ness Sen­ti­ment Track­er indi­cates a shift towards small­er jobs under $5K and soft­en­ing opti­mism, with only 55% expect­ing mar­ket growth over the next 12 months. Mate­r­i­al costs remain the top con­cern, with tar­iff wor­ries ris­ing from 35% to 44%. Bid­ding and awards have improved, with 77% of bids con­vert­ing and 73% of award­ed jobs start­ing, yet back­logs remain flat, and 31% of firms have post­poned or can­celed future jobs due to sched­ul­ing, prod­uct avail­abil­i­ty, and labor con­straints. Com­pe­ti­tion has sta­bi­lized, with around 52% of con­trac­tors report­ing more com­pe­ti­tion. Pur­chas­es of out­door-relat­ed prod­ucts, such as land­scap­ing sup­plies, stand­alone grills, and exte­ri­or paint, have increased.

What This Means for the Industry

Short-Term Posture:

• Lead with Val­ue: Posi­tion main­te­nance, repair, and refresh SKUs that deliv­er vis­i­ble gains at low­er tick­et sizes. Empha­size bun­dles that reduce trips and install time.
• Back the Exte­ri­or Mix: Sup­port sea­son­al demand in roof­ing, enve­lope, paint, and yard/​outdoor with in-stock depth, pro­mo­tion­al cadence, and attach­ment offers.
• Reduce Fric­tion for Pros: Mit­i­gate job delays with allo­ca­tion tools, pre­dictable lead times, and job-site deliv­ery win­dows. Pro­vide tar­iff-aware alter­na­tives and sub­sti­tu­tion guides.

Medium-Term Plays:

• Pre­pare for the 2026 Real Rebound: Stage cat­e­go­ry roadmaps and mar­ket­ing cal­en­dars now, with heav­ier con­sumer engage­ment as sen­ti­ment and incomes improve.
• Local­ize by Region: Pri­or­i­tize the Pacif­ic region in the near term and rebal­ance as region­al growth nor­mal­izes. Align assort­ments and con­tent to local hous­ing stock and weath­er patterns.

Looking Ahead: Home Improvement Forecast for 2026

Despite afford­abil­i­ty and cost head­winds, the market’s floor in late 2025 sets up a clean­er 2026 through 2029 in real terms. The win­ners will be those who meet home­own­ers where they plan, equip pros to exe­cute with­out delay, and invest in effi­cien­cy, avail­abil­i­ty, and trust­ed val­ue as the cycle turns.

Get Full Access to the Size of Market Forecast and More as a HIRI Member

The home improve­ment prod­ucts mar­ket is quite sen­si­tive to the health of the hous­ing sec­tor, as well as to basic indi­ca­tors of con­sumer demand, such as real income and rel­a­tive prices. To help prod­uct man­u­fac­tur­ers and sup­pli­ers plan for both best- and worst-case sce­nar­ios, HIR­I’s U.S. Home Improve­ment Prod­ucts Mar­ket Fore­cast pro­vides fore­cast­ing mod­els that take into account two alter­na­tives in terms of con­sumer demand and hous­ing mar­ket vari­ables. It also con­tains geo­graph­ic detail for the nine cen­sus divi­sions, show­ing eco­nom­ic growth and slow-down rates, as well as future fore­casts by region. For full access to the report and oth­er pro­pri­etary research, become a mem­ber of HIRI.