Remodelers Expect High-end Households To Steady Growth In 2026

The nation’s chronically aging housing stock, together with a lingering lock-in effect and a growing share of older homeowners who prefer to stay put, amounts to a trifecta for long-term remodeling and renovation growth expectations.

In the near- and midterm, however, the industry continues to grapple with economic uncertainty and an intensifying pervasive labor capacity constraint.

At the International Builders’ Show (IBS) this week, builders struck notes of cautious optimism.

In an interview with The Builder’s Daily, National Kitchen & Bath Association (NKBA) President & CEO Bill Darcy said remodelers feel even more confident than their homebuilding counterparts, as NKBA sees remodeling’s key drivers outpacing new residential construction.  

At IBS, National Association of Home Builders (NAHB) Economist Eric Lynch noted that the average age of a home increased from 31 years in 2006 to 41 years in 2023, which would logically lead more owners to pursue home improvement projects. Homeowners have also built more home equity after the post-pandemic boom in home prices, giving them greater financial wherewithal to undertake these projects.

The lion’s share of growth in the remodeling industry comes from higher-end households. Wealthier Americans are increasingly fueling spending growth in the American “K-shaped” economy, and remodeling is no exception. 

Exhibitors at the Kitchen & Bath Industry Show, co-located this week with IBS, took note of this trend. According to Darcy, many of the manufacturers at the show marketed luxury items, hoping to tap into this lucrative segment. 

“Yes, it’s a sliver of the top, but there’s a lot of money there, and [those upscale households] are not really being impacted by cost. I think this could further influence optimism, because the luxury sector could continue to grow and expand there. So we don’t see anything slowing down on the luxury [front], and it’s definitely having a big positive influence,” Darcy said. 

While Darcy sees the upper end of the remodeling market as driving most of the growth, he pointed to the “missing middle” of homeowners who are delaying projects as a trend holding the industry back from full recovery. However, there is some pent-up demand in this segment that could soon unlock itself, Darcy said. 

“There’s still this consumer uncertainty. They need to see consistent stability. We see more normalizing in the second half of the year,” he explained. 

The persistent labor shortage                  

Darcy said the labor capacity shortage in remodeling and residential construction has ranked as the remodeling and renovation industry’s No. 1 business risk for a long time. To combat this shortage, NKBA partnered with the NAHB’s National Housing Endowment to provide construction career grants. They also partner with middle and high schools and vocational schools to recruit more young people into the trades.

“The real big problem is, it’s very hard to penetrate the school systems with their priorities that they have. They have little time and too many other things going on,” Darcy said. 

Darcy also pointed to a persistent perception problem, despite the availability of fulfilling, well-paying careers in the construction industry. To combat these misconceptions, Darcy says that the industry needs more ambassadors, such as Mike Rowe of Dirty Jobs, who can better market the industry to the youth. 

However, this could prove challenging, especially considering the makeup of the residential construction workforce. According to data from the Home Builders Institute, immigrants accounted for 25.5% of the residential construction workforce in 2025, a new high. However, the nation’s immigrant population fell last year, shrinking the pool of immigrant labor in many markets. 

Additionally, over 90% of construction workers are men, but the male labor force participation rate continues to fall. In 2000, the male labor force participation rate was about 75%. It’s steadily declined since then and is now around 67%. With more men opting out of the workforce and stricter immigration policies in place, residential construction will need to recruit more young people and women to fill the gap. 

Closing the skilled labor shortage gap is crucial, according to Darcy. The labor shortage is already a major issue, but once pent-up demand enters the market, the shortage will likely become more pronounced.  

“When the missing middle comes back, then [the constraint on frontline skilled labor capacity] is going to get worse,” Darcy said.