Home Renovation Market: Size and Industry Growth

This article was written by our expert who surveys the home renovation industry and continually updates the business plan for a home renovation company.

Who wrote this content?

The Dojo Business Team

A team of financial experts, consultants, and writers

We're a team of finance experts, consultants, market analysts, and specialized writers dedicated to helping new entrepreneurs launch their businesses. We help you avoid costly mistakes by providing detailed business plans, accurate market studies, and reliable financial forecasts to maximize your chances of success from day one—especially in the home renovation market.

What is the global home renovation market size in total spending?

The global home renovation market totals about USD 2.05 trillion in 2025.

This figure covers remodeling, improvement, and renovation spend across major regions. North America remains the largest single region, with Europe close behind and Asia-Pacific accelerating.

For a new home renovation business, this confirms a deep addressable market with multiple profitable niches if you package services clearly. Focus early marketing on one or two high-demand scopes to build authority.

You’ll find detailed market insights in our home renovation business plan, updated every quarter.

Plan your offer tiers so prospects can choose quickly.

How fast has the market grown over the last five years?

The home renovation market grew at roughly 3.8%–4.8% CAGR from 2019 to 2024.

Growth varied by segment (full remodels vs. improvements) and by region, with Asia-Pacific outpacing mature markets. Despite rate hikes in 2022–2023, resilience came from aging stock, energy retrofits, and remote-work adaptations.

For your home renovation company, a steady CAGR means demand is consistent even in mixed macro cycles. Emphasize ROI, energy bills reduction, and space optimization in your sales scripts.

This is one of the strategies explained in our home renovation business plan.

Standardize proposals to shorten close times.

Which regions or countries lead the market today?

North America holds about 33%–35% of global home renovation spend, followed by Europe and a fast-growing Asia-Pacific.

The United States, China, Germany, Japan, and the United Kingdom dominate national shares. APAC’s momentum is tied to urbanization, new middle-class formation, and condo/apartment refurbishments.

Home renovation startups should align supplier relationships with the products favored locally (e.g., windows/doors in NA, energy retrofits in EU, space-saving layouts in APAC). Local permitting and standards shape timelines.

Get expert guidance and actionable steps inside our home renovation business plan.

Map your service menu to local demand patterns.

What are the main growth drivers in home renovation?

Four forces propel demand: aging housing stock, energy efficiency priorities, urbanization, and lifestyle shifts (WFH/space reconfiguration).

Government incentives for green upgrades and rising disposable incomes reinforce these trends. Smart-home adoption is a cross-cutting accelerant, often bundled with HVAC, windows, and roofing projects.

For a home renovation business, lead magnets that quantify energy savings and resale uplift convert well. Use before-and-after case studies and utility-bill estimators.

We cover this exact topic in the home renovation business plan.

Make “proof of ROI” central to your pitch.

What barriers are slowing market expansion?

Costs, constraints, and compliance are the main brakes.

• High material prices (lumber, metals, finish goods) and tight skilled labor supply.
• Mortgage and interest-rate volatility affecting large-ticket decisions.
• Permitting, inspections, and evolving codes—especially for green standards.
• Supply chain variability and lead times on custom items.
• Scope creep and design changes that inflate budgets mid-project.

How is demand distributed by renovation category?

Kitchen and bathroom projects lead share by value; exterior envelopes and energy retrofits are substantial; smart-home add-ons are rising.

DIY volume is high in developed markets, but DIFM (do-it-for-me) captures greater value and profit. Use packaged scopes with clear allowances to control change orders.

What is average household spending and how is it changing?

In the U.S., average household spending on remodeling exceeds USD 3,000 per year, with kitchens and bathrooms leading.

Spending rose post-pandemic and stabilized despite rate volatility, with energy-efficiency and maintenance projects sustaining baseline demand. Higher-income households still drive large scopes.

For your home renovation startup, anchor marketing to the “entry project” that fits a USD 8k–15k first ticket and ladder up to premium finishes. Offer 0% teaser financing when feasible.

It’s a key part of what we outline in the home renovation business plan.

Use tiered packages to raise average order value.

Who is spending the most on renovations?

Older homeowners (55+) and higher-income households account for the largest renovation budgets.

Investors/landlords and dual-income, tech-forward households are strong segments in urban markets. Aging-in-place upgrades, rental make-readies, and energy retrofits are reliable pipelines.

A home renovation company should segment offers: accessibility packages for seniors, rental refresh bundles for investors, and smart-energy bundles for professionals. Targeted messaging outperforms generic ads.

This is one of the many elements we break down in the home renovation business plan.

Build ICP-specific landing pages.

How do financing and incentives affect market growth?

Financing and incentives meaningfully expand project scope and speed go-aheads.

Home equity loans/lines and government energy incentives reduce upfront costs and nudge owners toward higher-efficiency specifications. Contractors who pre-package financing and rebate guidance win more bids.

For a home renovation startup, integrate lender partnerships and rebate processing into your sales process. Pre-qualify clients early to shorten cycle times and raise conversion.

This is one of the strategies explained in our home renovation business plan.

Publish a financing FAQ on your website.

Who captures the most value—contractors, suppliers, or tech platforms?

Contractors and specialist trades capture the largest share of delivered value, followed by material suppliers; tech platforms are growing from a smaller base.

• Design-build and specialty contractors: control the customer, scope, and schedule.
• Retailers/distributors: margin from volume SKUs and private label.
• Tech platforms: lead generation, virtual design, project tracking, marketplace fees.
• Manufacturers: value via brand, warranties, and certified-installer programs.
• Financing providers: interest fees and dealer discounts tied to close rates.

How do sustainability, smart homes, and aging-in-place shape demand?

Sustainability, smart tech, and accessibility each generate distinct project streams—and are often bundled.

Green retrofits (insulation, windows, heat pumps) ride policy support and bill savings. Smart systems attach to HVAC/lighting and security; aging-in-place combines bath safety, layout changes, and lighting.

For your home renovation business, build three themed packages with clear outcomes: “Energy Saver,” “Smart Comfort,” and “Safe & Accessible.” Each should include warranty and financing options.

Get expert guidance and actionable steps inside our home renovation business plan.

Show ROI and comfort gains in all proposals.

How will the market grow over the next 5–10 years?

The global home renovation market is projected to reach roughly USD 2.6–3.5 trillion by 2032–2035, implying ~3.8%–4.5% CAGR.

Asia-Pacific and Latin America are likely to outgrow North America and Europe, though mature markets remain large and profitable. Energy and digital upgrades will take a larger share of scopes.

Which countries hold the largest shares right now?

The United States, China, Germany, Japan, and the United Kingdom are the most influential national markets in 2025.

The U.S. leads in absolute spend; China leads APAC momentum; Germany and the UK anchor EU upgrades; Japan’s aging stock sustains steady retrofits. Each market has distinct code and supplier dynamics.

For a home renovation startup expanding internationally, partner with local manufacturers and certification bodies to ease compliance. Translate proposals and warranties to local expectations.

This is one of the strategies explained in our home renovation business plan.

Adjust SKUs and finishes by country preferences.

What are the most effective growth levers I can use as a new contractor?

Package, finance, and proof are your three levers.

1. Create 3–4 fixed-scope packages per category (e.g., “Bath Refresh,” “Energy Saver”).
2. Bundle financing and handle incentives end-to-end.
3. Show ROI with utility and resale calculators plus before/after galleries.
4. Systematize lead intake, site assessments, and change-order governance.
5. Lock supplier pricing and lead times via MOUs to protect margin.

How should I think about category mix in my pipeline?

Bias toward kitchen/bath for margin and visibility, then anchor exterior/energy projects for steady volume.

Use seasonal campaigns (roofing/windows pre-winter, outdoor living pre-spring). Build maintenance and service agreements for HVAC/electrical/plumbing to smooth cash flow.

For a home renovation business, the right mix stabilizes labor utilization and supplier relationships. Track win rates and gross margin by category monthly.

This is one of the many elements we break down in the home renovation business plan.

Iterate your mix quarterly based on conversion and margin data.

What KPIs should a new home renovation company track from day one?

Track leads, conversion, average job size, gross margin, days-to-install, and change-order rate.

Add backlog coverage (months), labor utilization, on-time completion, and CSAT/NPS. Review category-level margins weekly during ramp-up.

These indicators expose pricing issues and scheduling bottlenecks early. Automate with a CRM and job-costing tool to keep overhead lean.

Get expert guidance and actionable steps inside our home renovation business plan.

Report KPIs to the team every Monday.

Conclusion

This article is for informational purposes only and should not be considered financial advice. Readers are encouraged to consult with a qualified professional before making any investment decisions. We accept no liability for any actions taken based on the information provided.

Sources

1. Global Market Insights – Remodeling Market
2. Research Nester – Home Improvement Market
3. Fortune Business Insights – Home Renovation Market
4. DataIntelo – Global Home Remodeling Market
5. Home Improvement Research Institute – Market Forecast
6. The Business Research Company – Home Improvement Services
7. Technavio – Home Renovation Market
8. Statista – Home Improvement Topic
9. Maximize Market Research – Home Improvement Market
10. GlobeNewswire – Home Improvement Market Forecast