NAHB Reports Remodeling Gaining on New Construction

The new home building market remains stagnant but a new study reports home renovation is driving a larger share of the building market.

The number of remodeling companies has nearly doubled over the past 25 years, the National Association of Home Builders discovered when analyzing census bureau data, growing from fewer than 69,000 companies to more than 128,000 in the first quarter of this year. As such, they now represent over half, 56 percent, of all residential construction and building companies, the NAHB found.

And this appears to be a fundamental change in the market rather than something that might be temporarily caused by the pandemic or other conditions, it said. The trend appears to have started during the Great Recession housing collapse when the number of remodeling companies fell by only 8 percent, while as many as one-third of all home builders went out of business.

During the post-pandemic housing surge earlier this decade, both remodelers and builders saw their business boom but the former expanded faster than the latter, leading to today’s more dramatic contrast. With the new housing market remaining mired in one of its worst periods in recent history and mortgage rates showing no signs of appreciable drops, it’s expected that remodeling firms will continue to gain market share in the building trade.

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