The residential remodeling market grew to more than $600 billion in 2022, in the aftermath of the COVID-19 pandemic. Things then took a slight turn in 2023-24, leading to a marginal retraction. Despite changes, spending is projected to stay above $600 billion through 2025, according to research conducted by Harvard University’s Joint Center for Housing Studies (JCHS).
“Given the strong foundation and growing needs, residential remodeling is expected to remain a formidable economic sector in the years ahead,” states Chris Herbert, managing director of Harvard University’s Joint Center for Housing Studies (JCHS).
Meanwhile, results among door and window dealers over the past couple of years show variability. Sales data collected for [DWM]’s annual Top Dealers list shows revenue growth between 2023 and 2024 exceeding 50% for some companies, while others show declines of up to 23%. Minus a few outliers, average revenue growth from 2023 to 2024 was 9.9%.
Those numbers could have been higher, if the industry were less fragmented and dealers weren’t faced with inflation and a shortage of skilled trade labor, JCHS researchers suggest. According to one of Center’s recent reports, a significant proportion of remodelers are self-employed contractors or small payroll companies, which hampers the industry, along with high costs of building materials and labor shortages. Between 2015 and 2023, most remodelers reported a shortage of skilled trade workers, research shows. The construction industry has traditionally relied heavily on foreign-born laborers, with immigrants constituting 34% of the skilled trades labor force in 2023. Meanwhile, efforts to recruit and retain “younger, native-born, and female workers, as well as non-Hispanic people of color, for construction trade jobs are gradually diversifying the workforce,” researchers at JCHS report, but more initiatives are required to meet current and future labor needs they add.
Beating the Odds
Despite those negatives, substantial amounts of home equity, the continued trend of working from home, and an aging housing stock should support home improvement spending, experts suggest. As homeowners focus on energy efficiency, opportunities remain strong for products and services designed to fill performance gaps, research suggests.
“Despite unprecedented spending in recent years, far more investment is needed to improve energy efficiency, disaster resilience, and accessibility for the nation’s 145 million homes,” Herbert says.
Research also shows that homeowners remain focused on replacement projects, including doors and windows. Overall, replacements of roofing, HVAC and doors and windows comprised 49% of expenditures in 2023. But consumers also spent $139 billion on improvements impacting energy use—nearly four times the amount spent two decades earlier, giving high-performance fenestration products a key selling point.
“Each energy-related improvement presents an opportunity to reduce greenhouse gas emissions, enhance housing stock efficiency, and lower utility costs,” says Carlos Martín, director of JCHS’s Remodeling Futures Program.
Another factor set to drive demand for remodeling is the average age of America’s housing stock. With a median age of 44 years in 2023, houses are older than ever, necessitating essential improvements, researchers point out. “In 2023, average improvement spending for homes built before 1980 was 24% higher than spending on homes built since 2010, and maintenance spending was 76% higher,” a recent report notes.
There is also an increased need for remodeling and rebuilding driven by the growing frequency and intensity of hazardous events, such as hurricanes, wildfires, and flooding. In 2002–03, $16 billion was spent on disaster repairs; in 2022–2023, that figure rose to $49 billion.
Given these factors, residential remodeling “is expected to remain a formidable economic sector,” researchers suggest, as, barring a significant increase in homebuilding, the trend is projected to continue. The good news for dealers is—new or old, more homes will require doors and windows.