Navigating the Home Improvement Market Given the June 2025 U.S. Size of Home Improvement Market Forecast

Whether your role lies in inform­ing tar­get­ed mar­ket­ing cam­paigns, dri­ving prod­uct devel­op­ment or ana­lyz­ing con­sumer insights, stay­ing ahead of mar­ket trends and eco­nom­ic shifts is cru­cial for mak­ing strate­gic deci​sions​.In gen­er­al, the home improve­ment prod­ucts mar­ket is sig­nif­i­cant­ly tied to a vari­ety of eco­nom­ic indi­ca­tors, as well as what’s hap­pen­ing in the hous­ing indus­try. This includes inter­est rates, unem­ploy­ment rates, pay­roll gains, hous­ing starts, remod­el­ing activ­i­ty, con­sumer con­fi­dence and spend­ing, and oth­er variables.While pro­ject­ing mod­est growth in both the con­sumer and pro­fes­sion­al mar­kets, there is a fair amount of uncer­tain­ty influ­enc­ing future fore­casts, accord­ing to the Home Improve­ment Research Institute’s most recent iter­a­tion of its U.S. Home Improve­ment Prod­ucts Mar­ket Fore­cast, which offers valu­able insights into the state of the indus­try and the broad­er eco­nom­ic land­scape as of May 2025 data collection.

What is the Home Improvement Products Market Outlook?

The home improve­ment prod­ucts mar­ket increased slight­ly in 2024, with more growth on the hori­zon. The total home improve­ment mar­ket expand­ed by 3.7% to $574.3 bil­lion last year, and it is pro­ject­ed to grow by an addi­tion­al 3.4% in 2025. In 2026, the total mar­ket is pro­ject­ed to grow by 3.5% — with the pro­fes­sion­al mar­ket grow­ing by 2.7% and the con­sumer mar­ket grow­ing by 3.9%. The mar­ket is fore­cast­ed to reach approx­i­mate­ly $688 bil­lion by 2029, with the con­sumer mar­ket about dou­ble the size of the pro­fes­sion­al market.

Here are a few note­wor­thy eco­nom­ic trends that may affect the out­look for the home improve­ment prod­ucts mar­ket, and the econ­o­my as a whole:

1. Economy Unstable in Light of Volatile Trade Policy

Both trade pol­i­cy and uncer­tain­ty about trade pol­i­cy can influ­ence the real econ­o­my. Since tak­ing office, the Trump admin­is­tra­tion has announced and imple­ment­ed var­i­ous tar­iffs, includ­ing a 25% tar­iff on imports of steel and alu­minum prod­ucts that went into effect mid-March. Accord­ing to our research, the effects of trade pol­i­cy uncer­tain­ty (TPU) tend to be con­cen­trat­ed in the man­u­fac­tur­ing sec­tor and are direct­ly relat­ed to expo­sure to trade. How­ev­er, since April, the strength of the U.S. dol­lar has weak­ened which could impact equi­ty val­ues and raise trea­sury and pri­vate yields. The health of the U.S. econ­o­my remains in ques­tion. While the cur­rent out­look among econ­o­mists is that we will avoid a reces­sion, we con­tin­ue to expect below-poten­tial growth in the home improve­ment mar­ket over the remain­der of 2025.

2. Unemployment Rates are Fluctuating

Ear­li­er this year, pay­roll gains appeared to be robust, and the unem­ploy­ment rate had edged low­er — sug­gest­ing the U.S. econ­o­my was on sol­id foot­ing head­ing into 2025. Accord­ing to our most recent data, the unem­ploy­ment rate has increased com­pared to a low of 3.4% in the first half of 2023. The labor mar­ket has cooled in the first half of 2025, and the unem­ploy­ment rate is pro­ject­ed to drift high­er. One the flip-side, anoth­er eco­nom­ic indi­ca­tor that influ­ences spend­ing on home improve­ment activ­i­ties is real dis­pos­able income per house­hold. After increas­ing by about 2.7% in 2024, data shows a more mod­est 1.6% increase in 2025, with slight­ly high­er growth in dis­pos­able income pro­ject­ed from 2026 to 2029.

3. Consumer Price Index (CPI) Slowly on the Rise

The CPI rose by only 0.2% in April, and over­all, con­sumer price increas­es were tame. There is the poten­tial that some of the costs of tar­iffs will hit con­sumer prices in the com­ing months, but the sit­u­a­tion remains uncer­tain, as the U.S. con­tin­ues nego­ti­at­ing with trade part­ners. Mean­while, infla­tion for ser­vices — as opposed to goods — con­tin­ues to be the main dri­ver of over­all infla­tion. Core ser­vice infla­tion rose 0.3% in April. The uncer­tain­ty sur­round­ing trade pol­i­cy could pose addi­tion­al risk to the progress on inflation. 

The impacts on con­sumers ver­sus Pro are also var­ied, which is why HIR­I’s Size of Mar­ket Report­ing ana­lyzes these cus­tomer seg­ments separately.

What is the 2025 Outlook for the Consumer Market?

Con­sumer spend­ing slowed dur­ing the first quar­ter of 2025. Real per­son­al con­sump­tion expen­di­tures (PCE) seemed to be mov­ing in a pos­i­tive direc­tion by March, when com­pared to year-over-year quar­ter­ly data. Real spend­ing on goods and ser­vices was 4.3% and 2.8% high­er, respec­tive­ly, than a year ago — remain­ing above pre-pan­dem­ic trends. There is some uncer­tain­ty as we head into the sec­ond half of 2025, due in large part to sig­nif­i­cant changes to trade and immi­gra­tion policy. 

Our cur­rent fore­cast shows infla­tion spik­ing in Quar­ter 2 and fin­ish­ing up at 3.9%. At the same time, wage growth is slowing.Additionally, the Fed­er­al Reserve seems to be post­pon­ing any fur­ther actions to cut inter­est rates and assist with tem­per­ing infla­tion. Home improve­ment prod­uct man­u­fac­tur­ers and sup­pli­ers will have to con­tend with the uncer­tain­ty, espe­cial­ly not­ing that this cus­tomer base remains in a state of cau­tion. Look­ing ahead, exist­ing home sales are pro­ject­ed to grow by 5.3% in 2025. 

Real dis­pos­able income is pro­ject­ed to grow by 1.6%, and real per­son­al con­sump­tion expen­di­tures by 2.3% this year. Accord­ing to our most recent data, we are expect­ing con­sumer mar­ket sales of home improve­ment prod­ucts to increase about 3.9%, grow­ing to $400 bil­lion, in 2026, and an addi­tion­al aver­age growth rate of 4% from 2027 to 2029.

What is the 2025 Outlook for the Professional Market?

Look­ing for­ward to the sec­ond half of 2025, our fore­cast data shows that over­all home improve­ment prod­uct sales for the pro­fes­sion­al mar­ket are like­ly to grow mar­gin­al­ly. This is due in large part to the pro­ject­ed slow­down in the U.S. econ­o­my and hous­ing mar­ket. Esti­mates of pro­fes­sion­al mar­ket sales are also tied to data on pri­vate invest­ments in res­i­den­tial improve­ments, as report­ed in the Nation­al Income and Prod­uct Accounts by BEA. 

In gen­er­al, we expect sales to increase by about 4.9% in 2025 and an addi­tion­al 2.7% in 2026, before aver­ag­ing about 3.5% in 2027 to 2029.Like home­own­ers, home improve­ment pro­fes­sion­als are also respond­ing to the uncer­tain­ties sur­round­ing admin­is­tra­tion changes, U.S. trade pol­i­cy and how that will influ­ence eco­nom­ic recov­ery, impact­ing hous­ing and home improve­ment demand over the next year or so.Over the past four quar­ters, sin­gle-fam­i­ly, mul­ti­fam­i­ly, and total per­mits stag­nat­ed. Exist­ing home sales decreased by 0.9% in the first quar­ter of 2025, and hous­ing starts across the board fell by more than 11% in March. 

Mean­while, the inven­to­ry of exist­ing sin­gle-fam­i­ly homes climbed to 1.15 mil­lion and the inven­to­ry of new homes for sale increased to 503,000 — the high­est since Novem­ber 2007.The build­ing prod­uct cat­e­go­ry in the pro­fes­sion­al mar­ket with the high­est pro­ject­ed growth rate from 2025 to 2029 — or 2.3% — is nurs­ery stock and soil treat­ments. Sev­er­al oth­er cat­e­gories are pro­ject­ed growth about 2.1%, includ­ing lawn and gar­den equip­ment and sup­plies; tools; and hard­ware. All oth­er prod­uct cat­e­gories are fore­cast to grow beneath 2%.

What Merchandise Lines are on the Rise in 2025?

HIR­I’s U.S. Home Improve­ment Prod­ucts Mar­ket Fore­cast iden­ti­fies pro­jec­tions for the top 10 fastest-grow­ing mer­chan­dise lines, for both con­sumers and pro­fes­sion­als com­bined, based on pro­ject­ed CAGR in 2025 – 2028. These insights can help you align your prod­uct offer­ings and inven­to­ry lev­els with cur­rent and future mar­ket demand.

Top-Growing Building Product Categories

In 2025, the build­ing prod­uct cat­e­gories with the high­est com­pound annu­al growth rate (CAGR) include:

• Dimen­sion­al lum­ber and boards
• Lawn and gar­den equip­ment and supplies
• Insu­la­tion and weath­er­iza­tion products
• Gyp­sum and spe­cial­ty boards
• Oth­er build­ing materials
• Nurs­ery Stock and Soil Treatments
• Plumb­ing supplies
• Roof­ing and supplies

Look­ing ahead, here are the cat­e­gories fore­cast­ed with the high­est CAGR in 2025 to 2029:

• Lawn and gar­den equip­ment and supplies
• Gyp­sum and spe­cial­ty boards
• Roof­ing and supplies
• Oth­er build­ing materials
• Hard-sur­face floor­ing coverings
• Soft-sur­face floor coverings

In this case, ​“oth­er build­ing mate­ri­als” refers to heat­ing and HVAC units, duct­work, and heat­ing stoves; con­nec­tors; steel studs; glass; mason­ry sup­plies; ceil­ings & ceil­ing sys­tems; refrig­er­a­tion equip­ment and sup­plies; and all oth­er building/​structural mate­ri­als and supplies.

HIRI mem­bers receive access to the full U.S. Home Improve­ment Prod­ucts Mar­ket Fore­cast, which includes spe­cif­ic growth rate infor­ma­tion by prod­uct cat­e­go­ry, dif­fer­en­ti­at­ed by con­sumer ver­sus pro cus­tomers. The study includes: Prod­uct cat­e­go­ry – lev­el infor­ma­tion for both the con­sumer and pro­fes­sion­al mar­ket, includ­ing the dol­lar amount of sales for each prod­uct cat­e­go­ry and a cor­re­spond­ing year-over-year comparison Geo­graph­ic detail for the nine cen­sus divi­sions, show­ing, for exam­ple, eco­nom­ic growth and slow­down rates as well as future fore­casts by region Eco­nom­ic infor­ma­tion such as con­sumer spend­ing, sav­ing, invest­ment, mort­gage rates and employ­ment information

For full access to the report and oth­er pro­pri­etary research, become a mem­ber of HIRI.

Planning for the Future in the Home Improvement Market

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, our 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.