Key Homeowner and Contractor Trends in Q1 2026 [INFOGRAPHIC]

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Homeowners Decrease Activity but Contractors Maintain Steady Project Pipelines

In the first quarter of 2026, home improvement activity declined to its lowest point in five quarters, as fewer households engaged. Only 40% of homeowners completed a home improvement project in Q1 2026, down from 44% in Q1 2025. The pullback is mostly concentrated in discretionary renovation, while maintenance and repair have held firm. These trends point toward a contraction in overall market participation rather than weakening demand drivers, with more homeowners remaining on the sidelines despite stable underlying need for repair and improvement. However, for contractors, home improvement project pipelines show modest improvement, with bids and awards ticking up quarter-over-quarter and remaining above last year, supported by solid conversion. Backlog is stable, and even slightly easing, which suggests steady but not accelerating demand. Project mix is shifting slightly toward smaller jobs.

Contractors Remain Optimistic While Homeowners Struggle with Uncertainty

Contractors increasingly cite inflation and broader economic conditions as the primary macroeconomic pressures shaping their outlook over the next 12 months, affecting 49% and 56% of pros, respectively. Despite these pressures, sentiment remains constructive. More than half of contractors believe the home improvement market will grow “slightly” or “significantly” over the next 12 months. This is a slight decrease from Q4 2025, when 60% of contractors expressed positive sentiments, but not much of a decrease from the 58% in Q1 2025. The top concerns among homeowners have remained relatively consistent among homeowners over the past year, with the economy being the primary one, cited by 55% of homeowners. Other concerns reported in Q1 2026 include inflation (45%), political environment (34%), and personal finances (29%). Additionally, general uncertainty about the economy is underpinning other financials concerns, even though real income (or inflation-adjusted) is flat to slightly positive to start 2026.

Project Activity Remains Concentrated in Core Renovation Areas

About 64% of contractors completed bathroom projects in Q1 2026; 51% completed kitchen projects and 42% did projects related to other primary living spaces. This data is corroborated by homeowners, with 46% reporting they conducted a bathroom project in Q1 2026. Additionally, 28% worked on their kitchen and 26% completed a yard, garden, or landscape project. Households are currently prioritizing essential work, with home improvement moderating between necessity and discretion. Another statistic that gives insight into how homeowners are feeling about improvement is that, in Q1 2026, 62% chose to repair something in their home instead of replacing it, compared to 51% in Q4 2025. Looking ahead, project demand among homeowners will reportedly be focused on interior upgrades or remodeling (51%); maintenance or repairs (48%); and exterior improvements (40%).

Homeowners are Spending More on Improvements Compared to Last Year

Overall, the average spending per project increased in Q1 of 2026, even as fewer homeowners participated in home improvement activities. Among those who did complete projects, average spending reached $5,368, up from $3,957 in Q1 2025. The exact causes of the increased spending could be multifaceted. At the same time, cash payments declined to 51% (from 58% the prior year) as credit card use climbed to 30% (compared to 25% in Q1 2025). As cost pressures intensify, it seems to be driving increased reliance on financing and reducing the ability to self-fund projects.

Project Completion Methods Shift Toward a Hybrid Approach as Pure DIY Decreases

The purely DIY approach to home improvement continues to decline, as homeowners are increasingly combining self-performed work with contractor support. This enables them to balance cost control with the need for expertise as projects grow more complex and harder to execute independently. In Q1 2026, 39% of projects were completed DIY (including non-paid help), compared to 48% in Q1 2025. About 46% of projects utilized both DIY and contractor assistance, compared to 26% in Q1 2025, and 15% were done solely by a contractor, compared to 26% in Q1 2024. The main reasons why homeowners choose to hire a professional include technical expertise (61%); work quality (54%); guaranteed workmanship (43%); and specialized tools/equipment (43%).

Understanding the Dynamic Landscape of Home Improvement

HIRI’s quarterly Home Improvement Project Activity Tracker is designed to provide deep insights into homeowners’ current attitudes and motivations driving home improvement initiatives, shedding light on their recent activities and planned activities. Meanwhile, the quarterly Contractor Business Sentiment Tracker also offers a comprehensive view of contractors’ current and planned project activities, as well as the many factors influencing their operations. Additionally, these trackers include data on both DIY homeowners and contractors in regard to their preferred shopping channels, research methods, and sentiment toward home improvement activity, enabling manufacturers and suppliers to make informed decisions about product development and go-to-market strategies.