HIRI's September 2026 market forecast trimmed its outlook for 2026 growth by a tenth of a percentage point, from 2.6% to 2.5%. That is a small revision on its own, but it hides a real split between the two segments that make up the total, with the consumer segment revised down and the professional segment revised up. For home improvement manufacturers and retailers, which side of that split your business sits on matters more right now than the headline number does. This piece reads the HIRI's Q3 2026 U.S. Size of the Home Improvement Products Market Report and Forecast to explain what changed from June through September, what stayed the same, and what it means for how you plan.
HIRI's Q3 2026 U.S. Size of the Home Improvement Products Market Report and Forecast now projects the total home improvement market to grow 2.5% in 2026, down from the 2.6% outlook published in June. On its own, a tenth of a point is not much to react to. Underneath it, the two segments that make up that total moved in opposite directions. Consumer market sales are now forecasted to grow 3.4% in 2026, down from 3.7% in June. Professional market sales are now forecasted to grow 1.3%, up from 1% in June.
The total came down because the consumer segment, the larger of the two, weighs more heavily on the blended number. For a manufacturer selling mostly to homeowners, growth expectations for that segment declined since June. For one selling mostly through the trade, growth expectations improved. Reading only the total obscures which of those describes your business.
Growth in current dollars is not growth in real demand. Adjusted for inflation, HIRI's forecast shows the total market contracting 1.5% in 2026, with the consumer segment down 0.5% and the professional segment down 3.1%.
The professional segment is not one uniform group either. HIRI's own look at how brand importance and channel preference vary across professional buyer segments matters for interpreting a single blended professional segment number like the one above.
That professional number is worth digging deeper into. The same segment that got a nominal upgrade since June is still the one contracting the most once prices are stripped out. Higher prices, not more units moving through the channel, are carrying the professional segment's improved headline number. HIRI's own look at how inflation is hiding the real story in the building products market covers this same distinction in more depth, and the pattern it described earlier this year has not changed. For manufacturers, this means a better-looking nominal number from a segment does not mean more customers or more projects, since it can just as easily mean higher prices on the same or fewer transactions.
Real disposable income is projected to grow just 0.4% in 2026, unchanged from HIRI's prior forecast, even as real GDP growth slowed to 1.5% in the second quarter and real personal consumption expenditures accelerated to 3.2% from 0.5% over the same stretch. HIRI has previously suggested that disposable income, not consumer sentiment, is the variable that moves the underlying trend in building product spending, since sentiment can swing within a single quarter while income growth compounds over time. For manufacturers, flat income growth this persistent argues against expecting a durable, broad based acceleration in consumer demand this year, whatever a single month of sentiment data shows. HIRI's own take on what it takes to gain share when the overall market is not growing builds on this same point, describing a flat market as a share market, where growth must be taken from somewhere rather than simply arriving on its own.
HIRI's forecast models two alternate paths tied to the conflict with Iran, each assigned a 25% probability alongside the baseline. In the optimistic scenario, the conflict reaches a definitive end, energy prices ease, and consumer and business confidence both improve. In the pessimistic scenario, the conflict continues, energy prices stay elevated, and confidence weakens further.
The gap between the optimistic and pessimistic scenarios for 2026 itself is small. Under the optimistic path, total home improvement sales grow 2.52% in 2026, essentially the same as the 2.5% baseline. Under the pessimistic path, they grow 2.46%. The gap widens considerably by 2027, where the optimistic scenario reaches 3.7% growth and the pessimistic scenario falls to 3.3%, a real difference of four tenths of a point. For manufacturers building a plan for the rest of this year, how the conflict resolves is unlikely to move your numbers much. For manufacturers building a 2027 plan, it is worth watching closely.
The Federal Reserve raised its benchmark interest rate by 25 basis points to a target range of 3.75%–4.00% in September. For homeowners holding a mortgage locked in well below today's rates, another year of steady policy extends the same calculus that has favored remodeling over moving for the past several years. Manufacturers have already been planning around that dynamic, but this forecast now ties it to a specific timeline rather than a general expectation, which is worth building into a 2027 planning cycle directly.
HIRI's category level data separates the categories where the 2026 growth number is genuinely real from the ones where it is mostly come from inflated prices.
Siding and exterior trim stands out on both counts, showing strong growth in nominal terms and after adjusting for inflation, one of the few categories with strength on both measures. Soft-surface floor coverings shows the strongest real growth of any category HIRI tracked, even though its nominal growth is more modest. Dimensional lumber and boards leads on nominal growth, and still holds positive growth once inflation is removed. On the other end, major household appliances and kitchen and bath cabinets are weak on both measures, with real growth negative for both and nominal growth also negative for cabinets. That split lines up with the pattern HIRI's Homeowner Project Activity Tracker found on the homeowner side this summer, where kitchen work pulled back as a share of contractor activity while more repair-oriented categories held steadier. Necessity categories are carrying real growth, while discretionary, big ticket categories are not. For a manufacturer with a mixed category portfolio, that split is a more useful planning signal than the blended market number. HIRI members have access to category level growth rates from each iteration of the Size of Market Forecast and Report. Become a member.
None of these findings point to a booming market, and none of them point to a collapsing one either. The total forecast moved a tenth of a point. The real story sits in the pieces underneath it, a professional segment that looks better on paper but is contracting faster once inflation is stripped out, a consumer segment carrying most of the total's real softness, and a handful of categories, mostly the more necessity driven ones, doing the real work of holding the market together. For manufacturers and retailers, the planning takeaway is to treat the headline growth rate as a starting point, not an answer, and to check your own portfolio against the segment and category splits described here before setting next year's targets. HIRI's own playbook for gaining share without waiting on interest rates to fall lays out concrete steps for exactly this kind of flat, price supported market.
HIRI publishes its U.S. Size of the Home Improvement Products Market Report and Forecast every quarter, with five-year forecasts for both the consumer and professional segments across every major building product category, plus regional detail down to the state level. As a HIRI member, you have access to the full report behind every figure in this piece, along with the Monthly Economic and Industry Update, Quarterly Home Improvement Project Activity Tracker and Quarterly Contractor Business Sentiment Trackers.
In nominal terms yes, though the pace has been revised down slightly. HIRI's Q3 2026 U.S. Size of the Home Improvement Products Market Report and Forecast projects total market growth of 2.5% in 2026, down from the 2.6% outlook published in June. Adjusted for inflation, the market is still contracting, down 1.5% for the year, according to HIRI.
In nominal dollars, the consumer segment is still larger and growing faster, projected at 3.4% for 2026 compared with 1.3% for the professional segment, according to HIRI's Q3 2026 U.S. Size of the Home Improvement Products Market Report and Forecast. Adjusted for inflation, though, the professional segment is contracting more, down 3.1% compared with a 0.5% decline for the consumer segment, the Home Improvement Research Institute found.
Not much in 2026, but more by 2027. HIRI's forecast models an optimistic scenario in which the conflict ends and a pessimistic scenario in which it continues, each carrying a 25% probability. The 2026 growth rates under those two scenarios differ by only a few hundredths of a percentage point from the baseline, according to the Home Improvement Research Institute. By 2027, the gap widens to four tenths of a percentage point, a meaningfully larger swing.
Siding and exterior trim shows strong growth on both a nominal and an inflation-adjusted basis, according to HIRI's Q3 2026 U.S. Size of the Home Improvement Products Market Report and Forecast. Soft-surface floor coverings posts the strongest inflation-adjusted growth of any category tracked Major household appliances and kitchen and bath cabinets are weak on both measures.