While the median home renovation spend held steady at $20,000 in 2025, the top 10% of projects soared to $150,000 or more, a 7% rise from $140,000 in 2024, according to Hardware Retailing and Family Handyman. This surge in luxury projects, detailed in Houzz data, contrasts sharply with upcoming plans for most homeowners.
Current renovation activity and high-end spending remain strong. However, future homeowner plans indicate a significant pullback in median spend and overall participation. This creates a tension between present market strength and anticipated future contraction.
The renovation market is likely heading for a two-speed future. Luxury projects continue to thrive while the mainstream segment faces a slowdown. This suggests a stealth contraction is underway, masked by affluent spending.
Current Market Strength and Professional Reliance
In 2025, 54% of U.S. homeowners undertook renovation projects, with 52% decorating and 47% doing repairs, maintaining activity levels seen in recent years (Woodworking Network, Family Handyman). This sustained engagement, coupled with 91% of homeowners hiring professionals—especially general contractors (Hardware Retailing)—confirms a robust market, for now. It also highlights the continued value homeowners place on expert execution, even for smaller projects.
What Trends Point to a Renovation Market Shift?
The market's apparent stability in 2025, with a median renovation spend of $20,000, is a lagging indicator. Hardware Retailing data points to a planned 25% drop in median spend for 2026, alongside reduced homeowner participation. Current market robustness is misleading; a significant contraction is coming. While affluent homeowners drive growth—with top 10% projects soaring to $150,000 or more in 2025, a 7% increase—the majority face financial pressure. This growing wealth disparity means companies relying on broad market participation should brace for a downturn. The high-end boom won't offset the planned 2026 pullback in mainstream spending and participation.
How Are Homeowners Funding Their Renovation Projects?
A surprising 34% of homeowners finance renovations with credit cards, according to Family Handyman. This widespread reliance on high-interest debt reveals a hidden financial fragility. Much of the market operates on borrowed time, making the sector vulnerable to economic shifts and interest rate hikes. This financial pressure, even for median projects, could accelerate any market contraction. Companies must factor this vulnerability into demand forecasts.
What Are the Latest Trends in Home Renovation Spending for 2026?
For 2026, the median planned renovation spend drops to $15,000, a significant decrease from 2025. Only 50% of homeowners plan renovations, down from 54% in 2025 (Family Handyman, Hardware Retailing). This clear intent for reduced spending and participation signals a significant market contraction, particularly impacting the mid-range segment. Contractors focused on mainstream projects face a challenging period ahead.
By Q3 2026, general contractors focused on the mainstream market segment will likely face a significant drop in new projects, as 50% of homeowners plan renovations with a reduced median spend of $15,000, down from $20,000 in 2025.
