Remodeling has taken over a significant portion of the housing market, and most U.S. households cannot afford new construction. The number of renovation companies has almost doubled in the last 25 years, and renovation companies are now reported to make up over half (56%) of all residential construction companies (RBC). an analysis through the National Association of Home Builders View of housing construction.
The share of renovators in the RBC sector rose sharply after the 2008 real estate crash and has grown steadily since 2011. The post-pandemic real estate boom, fueled by low mortgage rates, the rise of remote work and demand for larger living spaces, has increased renovation activity. Remodeler The number of homebuilders has continued to grow amid recent Federal Reserve rate hikes because they are less sensitive to fluctuations in mortgage rates than homebuilders.
In 2024, the remodeling sector accounted for nearly half, 49%, of RBC workers. In the manufacturing workforce, more than half (51.2%) of workers work for remodeling companies, up from 30% in the early 2000s, according to the NAHB analysis Bureau of Labor Statistics Current Employment Status Survey (CES).
The typical remodeling business remains small, employing an average of between three and four employees per operation, with the increase in remodeling employment being due to the formation of new firms or the reclassification of home builders into renovation work as remodeling contractors.