{"id":3030,"date":"2026-03-23T21:52:11","date_gmt":"2026-03-23T21:52:11","guid":{"rendered":"https:\/\/lightingnewsnow.com\/?p=3030"},"modified":"2026-03-24T12:46:51","modified_gmt":"2026-03-24T12:46:51","slug":"home-improvement-insights-for-2026","status":"publish","type":"post","link":"https:\/\/lightingnewsnow.com\/?p=3030","title":{"rendered":"Home Improvement Insights for 2026"},"content":{"rendered":"\n

HIRI\u2019s executive director distills what the organization is hearing from consumers about their home improvement spending plans.  <\/strong><\/p>\n\n\n\n

In a lot of ways, \u201c2026 is going to feel a lot like 2025,\u201d noted Dave King, executive director of the Home Improvement Research Institute (HIRI), during a recent webinar. He mentioned that HIRI looked back over its 2025 data and has revised its forecast from Q3 2025. \u201cWe revised down from 3.7% to 1.5% \u2014 and that\u2019s a meaningful shift down since September,\u201d he said. \u201cIt\u2019s been a tumultuous time, with the government shutdown and all that it entailed. There\u2019s a lot of conversation about tariffs right now, especially with the Supreme Court coming out with its stance. We\u2019re trying to figure out how these things will land. It\u2019s also obvious there\u2019s going to be some debate about rebates and what the president can and can\u2019t do as it relates to tariffs.\u201d<\/p>\n\n\n\n

All that said, King noted that 1.5% growth is still a positive. He stated, \u201cThis is temperate growth. It\u2019s not negative \u2013 and that\u2019s great \u2013 but how much of that is inflation, how much of it is actual growth, and how does this impact different building product categories?\u201d<\/p>\n\n\n\n

At the time of the webinar, the International Builders\u2019 Show had just concluded in Las Vegas and King mentioned that he listened to what companies at the show were saying about the year ahead and how their businesses are faring.<\/p>\n\n\n\n

\u201cThe consensus is a hyper-focus on gaining market share,\u201d he said. \u201cThis is not a \u2018rising tide lifts all boats\u2019 situation. From a product perspective, you have to out-compete \u2014 and this was definitely a theme in 2025. Those who grew their businesses did so by gaining market share. There were some categories that did<\/em> see some growth as a vertical, but collectively, those of you who grew in 2025 should probably pat yourselves on the back for a job well done. This year is going to be even more competitive.\u201d<\/p>\n\n\n\n

What was key in 2025 were the large discretionary projects that were postponed, delayed, downsized, or cancelled. It varied by income group as to how the market adjusted to these changes, King explained.<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Pressure on growth<\/strong><\/p>\n\n\n\n

When it comes to 2026, HIRI\u2019s research indicates that most categories of building products will see growth only through inflation. \u201cThis matters,\u201d King said. \u201cWe all have to figure out how to compete and have growth when costs keep going up. We\u2019ve seen a number of ways that organizations are handling this. Some are \u2013 in the name of AI \u2013 letting staff go to keep the margins where they need to be.\u201d<\/p>\n\n\n\n

Noting pressure from Wall Street for companies to become more lean, King believes that in order to reach that goal, companies will be looking for cost-cutting measures. That pressure is expected to ramp up in 2026.<\/p>\n\n\n\n

King also pointed to the National Association of Realtors (NAR) survey posed to prospective homeowners that asks whether it\u2019s a good or bad time to buy a home. \u201cCollectively, 73% said it\u2019s a bad time,\u201d he said. \u201cThat number is really high, and I think we all know why. Home prices have gone up, and we have historic levels of equity right now in homes. So, for those who are already in a home, it\u2019s great. For everyone else, it\u2019s a challenging time because interest rates are high. Our view of  interest rates is that while there might be a mild decline over the year, there is not going to be a big shift in interest rates.\u201d<\/p>\n\n\n\n

Obviously, inflation has been a top topic among business owners everywhere. \u201cIn speaking with HIRI members, it\u2019s our understand that 90% of the tariffs have been passed on, but with everything going on right now with the Supreme Court decision, there might be some disruption here.  Our understanding is that even if the tariffs have to be largely reversed and not implemented in the future, it\u2019s still not going to give growth and we will still see a lot of inflationary pressure.\u201d<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

What homeowners are doing<\/strong><\/p>\n\n\n\n

Like other pundits in the home improvement and housing sector, King does not expect interest rates to drop significantly in 2026 or even in 2027. \u201cWhat we are predicting is a very mild drop in rates over time,\u201d he explained. \u201cSo anyone who is waiting until things suddenly drop, we\u2019re just not anticipating that happening anytime over the next five years.  A \u2018black swan\u2019 event could change that overnight \u2014 and if that happens, we\u2019ll update our forecast.\u201d<\/p>\n\n\n\n

When it comes to analyzing the habits of home buyers, this year is one of toughest ones to predict. \u201cSince 2000, we have had the fewest number of home buyers entering the market \u2014 and the next closest is 2022. We are truly in an anomaly period of time and it has real ramifications to the industry,\u201d King said.<\/p>\n\n\n\n

\u201cA lot of the research out there compares new construction with existing, but [HIRI] has sort of flipped that idea on its head and said let\u2019s look at the person. We know there are certain verticals \u2013 outdoor power equipment is a great example \u2013 regarding first-time home buyers. First they buy the home, and then they have to buy all of the equipment for it. This has a very disparate impact, depending on the category that you\u2019re in,\u201d King stated. \u201cYou might say that your particular vertical is doing better or worse than the overall average, but one of the most important questions to ask is, \u2018How reliant is it on new home owners or first-time home buyers entering the market? With fewer homes being bought and sold, that negatively impacts total spend.\u201d<\/p>\n\n\n\n

The age-old model of new homes being purchased and existing homes being sold has started to struggle over the past couple of years because of an overreliance on that continual turnover, according to King. \u201cBecause we know that new home buyers and sellers spend more on their home \u2014 they\u2019re getting ready to sell or are making their new home their own,\u201d he said. \u201cHowever, what many of these models struggle to capture was the golden interest rates of people who have mortgages under 2%, 3% and 4%. For these people, to sell their home and buy another one has become cost-prohibitive,\u201d he added, noting that the interest rate on a new 30-year mortgage might be double the cost of their payment currently. \u00a0<\/p>\n\n\n\n

\u201cAs such, we are seeing more remodeling in place. That\u2019s a major theme that we\u2019ve seen,\u201d King said. As he explained, if homeowners take out a home equity loan at 8% to remodel their homes the way they\u2019d like, it\u2019s still cheaper than selling and buying a home at current rates. \u201cThose people are going to struggle to move in this environment,\u201d he cautioned. As a result, any housing movement will most likely come from those who are forced to move due to their job or to be closer to family.<\/p>\n\n\n\n

Renewed emphasis on remodeling<\/strong><\/p>\n\n\n\n

 According to research, roughly 10% of the population needs to move every 10 years.
If interest rates are still above 5%, then half of that population who would normally want to move will not be doing so because of the current environment.<\/p>\n\n\n\n

\u201cThink about how that accumulates over time,\u201d King said. \u201cLet\u2019s say in 2022, you\u2019re thinking about moving. In 2023 you want to move, but you\u2019re not going to because of the interest rates. Now it\u2019s 2024 and your neighbor is also wanting to move, but they\u2019re also not moving for the same reason. This creates pressure and pent-up demand for moving. If interest rates change drastically, I think we\u2019d see an explosion of homes coming on the market. We think that if rates do decrease, they will do so mildly and very conservatively, which would make a lot more sense for the stability of our economy.\u201d<\/p>\n\n\n\n

The pandemic effect lingers \u2014 in a good way<\/strong><\/p>\n\n\n\n

HIRI typically collects its data from two separate groups \u2013 homeowners and contractors \u2013  close to the end of each quarter.  For 2025, HIRI saw a mild increase in the amount of home improvement activity, plus it observed consistency as to the type of activity.  <\/p>\n\n\n\n

\u201cAs the pandemic came toward the end, there was a lot of conversation as to whether home improvement was just going to drop off a cliff because no one traveled for two years and now they wanted to travel. Collectively, we didn\u2019t see that happen,\u201d King reported. \u201cThe pandemic led to a structural increase in the demand. It wasn\u2019t a case of people saying, \u2018I was going to wait until next year to do this project, but I\u2019ll just do it now.\u2019  Instead it was, \u2018The pandemic helped me understand the importance and the role of the home in my personal wellbeing and happiness.\u2019 As such, we\u2019ve seen continued growth in the home improvement industry. The last couple of years have largely been driven by inflation, but we haven\u2019t seen any wholesale drop that says it\u2019s just not important to homeowners.\u201d<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Where are they spending?<\/strong><\/p>\n\n\n\n

Among homeowners surveyed, 34% indicated they are looking to spend more in home improvement. \u201cThe only category that is higher than home improvement is groceries\/household necessities \u2014 which is an inflationary expectation,\u201d King explained, pointing out that the home improvement category has ranked number two in spending intentions for the past two years.<\/p>\n\n\n\n

Referring to the recent Consumer Sentiment tracker numbers, released by the University of Michigan, King said HIRI does not see a correlation between consumer sentiment and building product spend. \u201cSo how we feel versus how money is spent aren\u2019t related,\u201d he quipped. \u201cA better predictor than consumer sentiment is what\u2019s happening with disposable income \u2014 and that has a four or five quarter lag. One perspective to have in mind when we forecast out disposable income is that if, fundamentally, you\u2019re making more than you did one year ago or five quarters ago, you\u2019re still likely to spend on home improvements.\u201d<\/p>\n\n\n\n

King also cited the recent National Housing Survey, provided by the Census Bureau, which polled 250,000 people. \u201cVery consistently, the top 20% of all income earners make up 50% of home improvement spend,\u201d he said. \u201cThink about your business. Does it skew anything different from the national demographics? If so, it might have a disparate impact on your organization and the growth that you\u2019re seeing or not seeing. Half of all spend is not coming from those who are under extreme pressure financially; that half is coming from those who have healthy incomes.\u201d<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Who\u2019s doing the spending?<\/strong><\/p>\n\n\n\n

King noted that income levels handle their remodeling efforts differently. The upper income levels are still hiring professionals and moving forward with their projects. \u201cThere\u2019s just a very small decrease in the percentage of work that they\u2019re doing. Instead of going ultra-premium, they might go to premium and drop down one level.\u201d<\/p>\n\n\n\n

The middle group is the population that\u2019s doing more DIY projects relative to what they\u2019d want to be doing, King explained. \u201cIn other words, they still want to do the project, but they need to figure out a way to do it. So while the percentages might be a little down, those projects are still getting done via DIY. It\u2019s the lower-income groups who are more likely to defer or delay, cancel or postpone \u2014 where a home improvement project is just not in the cards for them this year.\u201d<\/p>\n\n\n\n

Younger generations are now showing up<\/strong><\/p>\n\n\n\n

The center mass of spend in building products has officially entered Gen X category, according to King. \u201cWe\u2019re looking at that same American Housing Center data over time, and what we can see in this most recent analysis is that Gen X has hit that 50th<\/sup> percentile.  What is important to note is the growth we\u2019re seeing among Millennials, plus Gen Z is finally popping up on the board.\u201d<\/p>\n\n\n\n

The Millennial mindset has also shifted as they\u2019ve gotten older. \u201cThe generation that just one decade ago was saying they don\u2019t want to own homes, they want to share, and they want experiences are \u2013 it turns out \u2013 just getting a late start reaching these critical milestones in life. They want the same things as the generations before them, and this is very predictable [historically],\u201d King commented. \u201cIt will continue to grow. The wave is coming. The shift between the old and the young is very predictable \u2014 we know what\u2019s going to happen over the next 10 years.\u201d<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

When HIRI researchers spoke with professionals in the remodeling industry, they found that 60% anticipate growing their business over the next 12 months. \u201cThat\u2019s very interesting, particularly in a year where we\u2019re flat,\u201d King said. \u201cThere are two interesting insights to be gleaned. The first is that, generally speaking, businesses are being told that they should grow and there is a lot of pressure to grow. If the industry is flat, then part of that growth has to be at the expense of someone else \u2014 so we think that wrapped up in part of these (estimated) percentages is the mandate to grow.\u201d<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

King\u2019s advice to those businesses who count contractors as a significant portion of their sales is to know that they are hungry to grow their businesses. \u201cAnything you can do to help them with that is going to have dividends,\u201d he stated. \u201cOur research shows that anything you can do to save them time \u2013 especially since there is a labor shortage \u2013 is something they\u2019ll be willing to invest in.\u201d The number one pain point among contractors is quality, according to HIRI research. \u201cThey don\u2019t want to come back and have to rip something out and put something else in, because that takes up time,\u201d he said.<\/p>\n\n\n\n

Implications for 2026<\/strong><\/p>\n\n\n\n

King\u2019s advice to industry professionals is to \u201cdesign for the stay-driven homeowner versus the move-driven one. We still have a large part of the population who are going to be staying in place, but they still are wanting to make improvements. Make sure you are thinking of a strategy to get their attention.\u201d<\/p>\n\n\n\n

According to HIRI research, large discretionary spending in home improvement is the most challenging. Kitchen and bath cabinets were named as examples, especially since there is a lot of competition.<\/p>\n\n\n\n

\u201cIf the project is a big ticket but is an emergency, they\u2019ll spend. If it\u2019s a small ticket discretionary spend, it\u2019s happening,\u201d King noted. Between those two groups lies the biggest challenge. \u201cMeet consumers where they are, not where they aspire to be,\u201d he advised.<\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

HIRI\u2019s executive director distills what the organization is hearing from consumers about their home improvement spending plans.   In a lot of ways, \u201c2026 is going to feel a lot like 2025,\u201d noted Dave King, executive director of the Home Improvement Research Institute (HIRI), during a recent webinar. 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