Uncertainty, Opportunity and the 2026 Home Improvement Landscape

By ERIC VOYER

At this year’s International Roofing Expo, I had the opportunity to present alongside Grant Farnsworth on the state of the home improvement industry.

Our goal? To bring clarity to a market defined by complexity and opportunity.

We covered a lot of ground, from macroeconomic signals to homeowner psychology, from supply chain and labor constraints to growth forecasts for 2026. While uncertainty prevails, just this week there are some signs of tailwinds moving out industry into more positive territory. Here are some of the biggest takeaways from that conversation.

1. The Labor Crisis Isn’t Over- and It’s Not Going Away

Even as some market activity softens, the challenge of finding skilled labor persists – and it’s expected to intensify. Job openings in construction are again on the rise, and we’re entering a period where demand will rebound faster than labor capacity.

The implications are clear: efficiency will become a differentiator. Companies that embrace products, systems and services that save time-whether through faster installs or smarter supply chain management-will win.

2. We’re Undersupplied – and That’s Driving Home Values

We remain in a persistent housing shortage, especially for single-family homes. Permit activity has slowed, and builders are struggling with the “five Ls”: labor, land, lumber, logistics and legislation.

The result? Home prices are holding or growing in many markets. Nationally, home equity is at historic highs-up more than 40 percent since the pandemic. This equity is key. It enables homeowners to fund larger projects, even amid higher borrowing costs.

3. Homeowners Are Ready, But Still Cautious

Yes, demand exists. But so does hesitation.

We’re seeing a consumer that’s financially equipped but emotionally constrained. Confidence is low. Even affluent homeowners are questioning whether now is the “right” time to move forward.

Your job as a pro or manufacturer isn’t just to sell; it’s to reassure. To guide. To help homeowners feel confident in their decisions. And to offer assortments (good/better/best) that acknowledge their financial realities.

4. Millennials Are Your Growth Market

The average first-time homebuyer is now 38. That’s squarely in the millennial cohort, and it means this generation is just beginning its prime years for remodeling spend.

Millennials are more optimistic about home improvement than any other group. They value quality, they do their research and they’re willing to spend – especially on projects that increase comfort, efficiency and value.

5. 2026 Outlook: Modest Growth, Fierce Competition

Our forecast calls for 3 percent to 4 percent growth in the home improvement sector next year. Not explosive, but steady – especially if rates continue to ease and uncertainty stabilizes. Housing starts on multifamily are expected to be down from 2025 while single family are expected to be a very modest (read: close to flat) growth.

But the days of you, the contractor, “just showing up and getting the job” are behind us. Homeowners are collecting bids. They’re more cost-conscious. They’re asking tough questions.

This is a year to compete. To refine your value proposition. To lean into data, empathy and strategy.

Final Thought: Competing in a Flat Market Requires Clarity and Confidence

The fundamentals are still strong; demand, demographics and equity are all on your side. Remember that uncertainty goes both ways – last week’s announcements on housing proved that they can be a positive. But success in 2026 won’t come from riding a wave. It will come from understanding what homeowners want, showing them the value you offer, and helping them overcome the noise and hesitation they feel.

The future isn’t certain, but it is full of opportunity for those prepared to meet it head-on.

Eric Voyer is director at The Farnsworth Group.