The U.S. housing market is in a state of stagnation heading into 2026, with elevated mortgage rates, high home prices, increasing material costs, borrowing costs putting a constraint on buying power, and a continued sense of consumer uncertainty.
Forecasts suggest flat to gradual improvement, with ongoing headwinds from employment concerns, savings declines, and weak disposable income. Tailwinds that could lead to increase home improvement activity are recent mortgage rate ease, strong home improvement project intent, ongoing household formations, an aging housing stock, and record levels of national home equity. Additionally, the repair and maintenance sectors historically remain more resilient in soft markets.
Building products manufacturers and suppliers who want to keep sales and comps strong must compete to take share in this constrained U.S. remodeling market and make adjustments to target repair and remodel customers, reduce financial concerns, and simplify decision-making for homeowners and contractors.
Home Repair and Maintenance Activity Favored in 2026
With the national median home now more than 40 years old, national equity at record highs, and low mobility rates due to high home values with sub 4% mortgages, this builds a strong position for maintenance, repairs, and efficiency improvements. History shows that repair and maintenance categories are less volatile than new construction or discretionary remodeling projects in uncertain or sluggish markets.
From a market supply perspective, builders are slowing single-family starts, although multi-family construction has benefited from the market imbalance, as affordability and inventory challenges push households toward renting rather than owning. In terms of demand, the desire for housing and home improvement persists but is constrained by financial realities and negative sentiment towards high-dollar expenditures. Mortgage rates have declined sooner than anticipated in 2026 in part from a multi-billion dollar buyback of mortgage backed securities, and while affordability has seen a slight improvement, it's still is near generational lows. Household incomes have not fully kept pace with inflation and borrowing costs, which is putting downward pressure on savings rates and disposable income. Disposable Income is a variable The Farnsworth Group has proven are highly correlated to Home Improvement spend.
Additionally, customer confidence has weakened, home buying sentiment is at all-time lows, and consumers outlook on the future is lower than during the height of the pandemic, leading to cancelations, delayed decisions, smaller project scopes, and increased sensitivity to price and value, according to our Quarterly Homeowner Activity Tracker. Project postponements rose to a five-quarter high in the third quarter of 2025, driven primarily by budget constraints and rising labor costs, although material availability was also a notably significant issue.
There is still interest in home improvement projects, with the most homeowner optimism around smaller projects, or those in the $5,000 or less range. About three in four homeowners feel it is a good or neutral time to begin a more economical home improvement project, while more than half believe it’s a bad time to start a mid-range ($5,000 to $25,000) project and nearly 70% feel it's a bad time to do a large, $25,000+ project.
While pricing and rates are causing delays, many homeowners are moving forward with improvement projects, committing to their homes, primarily leveraging cash saved and credit cards, with few borrowing against high home equity. In some cases we continue to see consumers making compromises on the product or brand chosen for their projects to make it more attainable.
A variety of factors contribute to the persistent demand, such as increasing home value; improving energy efficiency, convenience, and healthy home features; and customizing older homes to fit modern sensibilities and lifestyles. Many property owners also want to take advantage of the significant appreciation in housing prices that’s occurred over the past couple of years by making investments into their own homes to maintain and improve their home.
According to findings in our Quarterly Contractor Activity Tracker for Q4 of 2025, more than half of contractors surveyed expected their company’s revenue to increase over the next 12 months, suggesting cautious optimism as many look for the market and homeowner sentiment to settle. Some of the areas they view as possessing the great opportunities include energy efficiency and renewable energy installations; technology integration; and eco-friendly and health-conscious materials.
Leveraging Demand for Home Improvement Projects
As building material manufacturers, retailers, and suppliers, you can capitalize on homeowner investments being made into home repair and remodeling in the U.S. One of the first steps is identifying trends in consumer and pro behaviors and how those are driving the market.
Current and prospective homeowners are being drawn toward sustainable and efficiency related construction and integrating smart technology throughout their houses. Here are some of the other most common upgrades and repairs being planned by homeowners in 2026:
1. Improving Indoor Air Quality
According to findings in the Healthy & Safe Home and Environmental & Energy Performance Attitudes Study, prepared by The Farnsworth Group in conjunction with Harvard’s Joint Center for Housing Studies, owners and renters were primarily concerned about indoor air quality when it comes to the health and wellness of their home. Flooding, moisture and mold removal, as well as pest control, are also among the top concerns.
These sentiments are reflected in the home improvement projects that are top of mind for completion moving forward. For example, about one-third of concerned homeowners are planning projects that involve IAQ monitoring systems in the future.
2. Making energy efficient upgrades
Energy efficiency is often lacking in older structures, plus it’s a big selling point. As a result, homeowners are frequently looking at ways to improve their home’s energy efficiency, whether it be installing high-efficiency insulation, better HVAC systems, solar panels, high-efficiency windows and doors, or adding energy efficient appliances during a kitchen or bathroom remodel. Air quality and overall inhabitant health and well being are other major concerns when it comes to HVAC upgrades. However, reducing energy costs for the homeowner continues to be the leading driver behind these project and product decisions.
Some of the top environmental or energy improvement activities completed recently by homeowners include installing an electric stove, cooktop, range, or oven; energy-efficient windows and doors; and water filtration systems.
There are also some shifting trends in terms of priority, with planned activities in solar equipment, tankless water heaters, and improved lighting surging in the coming months. Manufacturers and suppliers may be able to optimize on these emerging trends in homeowners’ interest and intent.
3. Increasing disaster readiness
As climate-related disasters proliferate, property owners are also investing into improvement projects and repairs that address emergency preparedness. Some of these activities include foundation upgrades, incorporating impact-resistant roofing materials, and mitigating hazards. This trend may be more prevalent in markets that are specifically susceptible to disasters like wildfires, storms and flooding.
4. Balancing indoor-outdoor living
Finding a balance of indoor-outdoor living was already a priority for many homeowners, but accelerated sharply in 2021 and 2022. Although that trend was driven heavily by the COVID-19 pandemic, with people wanting to enhance their at-home experience, it did spark an ongoing interest in optimizing exterior living spaces or adding new ones, such as decks and patios, and making outdoor improvements to yards and gardens. These exterior projects cultivate demand for outdoor supplies and specific lines of paints and coatings. Additionally, homeowners are also seeking better indoor-outdoor balance and pursuing wellness-centric projects that integrate a biophilic design.
5. Expanding inhabitable spaces with ADUs
As the housing crisis persists throughout the U.S., there is also a drive to create more living space. As part of the drive to embrace affordable housing solutions, property owners are finishing basements and attics, making additions, or even building new accessory dwelling units (ADUs) on their properties. These can serve as multigenerational housing or be used by renters. However, there is no need to build new housing on properties with existing basement units or detached garages or structures that can be converted. This trend is also creating movement among local regulatory bodies to introduce regulations and legislation that overrides policies from the post WWII era. Over the past couple of years, several states have considered or adopted legislation offering tax exemptions, streamlined inspections, and other measures to make the construction of ADUs more affordable, accessible, and effective.
6. Adding smart home features
Technology is moving quickly these days, and property owners are looking for ways to incorporate new features into their homes and other building. From integrated security systems and automated lighting solutions to smart appliances, these types of technology are perceived as a way to increase comfort, convenience and livability. More and more, they are becoming a baseline expectation. Building product brands should look into ways they can meet the demand for new technologies that address the demand for smart home upgrades.
7. Bringing Older Homes Up to Date
In light of the aging housing stock, and many homeowners staying put, there is great demand for renovations, upgrades and repairs, and there will be quite a bit of work completed by contractors and DIY homeowners alike for years to come. According the National Association of Realtors’ 2025 Remodeling Impact Report, with homeowners opting to stay in their houses longer instead of moving, they’re looking to undertake projects that involve upgrading worn-out surfaces, finishes and materials and adding new features to improve extended livability.
Reaching Customers Where They Are
When you are evaluating and prioritizing which marketing channels to invest into, consider first where the customers are conducting project and product research, as well as making purchases.
According to findings from the 2026 Building Products Customer Guide, both DIYers and trade professionals are mixing modes of product research across in-store and online options during their path to purchase. The importance of a strong digital presence and reliable in-store availability cannot be overstated. These seamless experiences must increase efficiency, provide transparency, and empower customers with options to meet their project or budget needs.
More than 90% of DIYers did at least some online research before making a purchase, with 38% dedicating about an hour, 32% dedicating about 30 minutes, and 16% dedicating several hours. The younger the DIYer, the more likely they were to spend more than an hour researching.
Trade professionals and contractors tend to be serious about researching their building products. About 73% spend at least 30 minutes researching before buying, and 81% do research both online and in-store. Their top online searches revolve around price (71%) and availability (63%), continuing the trend from the past few years.
As of our findings for 2025, digital engagement—including online research and social media—continues to play a bigger role in purchasing decisions among building product customers. We don’t project these behaviors to change in 2026 and beyond, so brands that prioritize an omni-channel approach are in the best position to meet customers where they’re at and motivate them to make purchases.
Researching Opportunities in the Resilient Repair and Remodel Sector
These are a couple of widespread trends impacting the repair and remodel sector that can guide your strategic decision-making in order to keep pace with the competition and increase sales for building products in the coming years. However, it’s also important to conduct your own custom market research to better understand your brand health, consumer attitudes, product needs, and market size. Gathering in depth customer usage and attitude insights and brand share will help you identify opportunities for growth and inform your product development, to ensure you are targeting the right demographics within the construction industry.
The Farnsworth Group has been conducting specialized marketing research for building products companies for more than 30 years. Simply, book your consultation where we will talk through ways to finesse your product marketing strategy to take advantage of opportunities in the home repair and remodel sector.
