Home Renovation Market Size, Share & Industry Analysis, By Project (DIY and Professional), By Application (Interior Renovation, Exterior Renovation, Energy Efficiency, and Additions), By Spending Budget (Low-Budget Renovators, Mid-range Renovators, and High-end Renovators), By Renovation Type (Functional Renovation, Aesthetic Renovation, and Value-Driven Renovation), and Regional Forecast, 2025-2032

The global home renovation market size valued at USD 1,994.02 billion in 2024. The market is projected to grow from USD 2,049.25 billion in 2025 to USD  2,659.60 billion by 2032, exhibiting a CAGR of 3.79% over the forecast period. 

Home renovation involves improving or upgrading residential spaces to enhance functionality, aesthetics, or property value. Common projects include kitchen remodeling, bathroom upgrades, and energy-efficient installations. Post-pandemic, the renovation market has seen significant growth as homeowners prioritize comfort and multifunctional spaces.  

The global home renovation market is expected to grow steadily, driven by growing urbanization, rising disposable income, and an emphasis on sustainability. Trends such as smart home integration, eco-friendly materials, and minimalistic designs are shaping consumer preferences. Additionally, Do it yourself (DIY) solutions and home improvements and repairs technology are gaining traction. While economic fluctuations and rising materials costs pose challenges, demand for renovation remains strong, especially in urban and suburban areas. Industry players are capitalizing on innovative designs and sustainable solutions to meet the evolving needs of customers.  

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MARKET DYNAMICS

Market Drivers

Rising Appeal for Personalized Spaces to Amplify Market Growth

Homeowners increasingly seek to personalize their living spaces to reflect their unique tastes and lifestyles. This trend is fueled by the growing popularity of DIY home projects, customized furniture, and innovative designs showcased on social media platforms. As people spend more time at home, especially post-pandemic, the demand for tailored renovations that enhance functionality and aesthetics has surged. High GDP, an active construction sector, and high per capita income further boost this demand. For instance, the U.S. Census Bureau and the U.S. Department of Housing and Urban Development cited that new home sales in October 2024 mounted at 610,000 units with an average sale price of USD 545,800.

Growing Investment in Energy-Efficient Homes to Consolidate Market Dynamics

With a heightened focus on sustainability and cost savings, many homeowners are investing in energy-efficient renovations. With the rising interest rates, homeowners are deferring new home purchases to escape high mortgages and instead opting to remodel and upgrade their existing homes. For instance, according to the latest leading indicator of remodeling activity (LIRA) from the Director of the Joint Center for Housing Studies of Harvard University projects annual expenditure for home renovation and maintenance to grow by 1.2% through the third quarter of 2025. Homeowners are willing to pay more for energy-efficient and sustainable solutions, reflecting a growing trend toward environmentally friendly and cost-saving home improvements and maintenance. Examples of sustainable products include installing solar panels, upgrading insulation, and adopting smart home technologies. Government incentives and the long-term financial benefits of reducing energy consumption are driving this trend, further augmenting the global home renovation market growth.

Market Restraints

Hefty Cost and Limited Affordability of Home Renovation Projects to Hamper Market Growth

High costs associated with home renovation limit its affordability to higher middle-class to high-class individuals, restricting the growth of the home remodeling market.  Rising materials prices, labor charges, and additional expenses often make such projects unaffordable for middle-income households. Additionally, fluctuating economic conditions and inflation discourage homeowners from investing in renovations, especially for non-essential upgrades. Financing options such as loans can alleviate this to some extent, but stringent eligibility criteria and high interest rates further limit accessibility. Consequently, many homeowners delay or forgo renovations, hindering overall market growth.

Market Opportunity

Smart Home Integration Solutions to Offer Lucrative Growth Opportunities

The growing demand for smart home technology presents a high potential opportunity in the home renovation industry. As homeowners seek to enhance convenience, security, and energy efficiency, integrating smart devices such as automated lighting, thermostats, voice-controlled systems, and home security cameras has become a priority. The Leading Indicator of Remodeling Activity (LIRA), a key home repair and spending indicator in the U.S., released by the Joint Center for Housing Studies of Harvard University in October 2024 by the Remodeling Futures Program (an initiative of the Harvard Joint Center for Housing Studies), predicted that spending for repairs and renovation activities across owner-occupied homes in the U.S. will continue to expand by mid-2025. With a considerable number of homes improved, the LIRA also predicts that the spending for home maintenance and renovation will increase through the second half of 2025.

According to the LIRA report, spending on improvements and repairs for owner-occupied homes is expected to expand from USD 472 billion in the third quarter of 2024 to USD 477 billion by the third quarter of 2025.

Offering tailored smart home renovation packages, including seamless wiring, device installation, and user training, can appeal to tech-savvy consumers. With rising interest in eco-friendly solutions, integrating solar-powered or energy-saving systems further enhances appeal. Businesses that position themselves as experts in both design and technology integration can capture a lucrative segment of this rapidly growing market.

Market Challenges

Shortage of Skilled Labor In Home Remodelling Industry to Pose Significant Challenge

One of the primary challenges faced by the industry is the shortage of skilled labor. With the rising demand for refurbishment projects, there is a growing gap between the need for experienced tradespeople and the availability of qualified workers. This shortage often results in project delays, increased labor costs, and compromises in workmanship quality. Additionally, many younger workers are choosing careers in technology or other industries, further reducing the pool of skilled professionals in construction and renovation. Subsequently, homeowners and contractors face difficulties in completing projects efficiently and maintaining high standards in an already competitive market.

HOME RENNOVATION MARKET TRENDS

Inclination of Consumers toward Functionality-Driven Solutions to Augment Growth of the Market

Homeowners are increasingly opting for aesthetics combined with functionality when renovating their spaces. Some popular trends include open floor plans with flexible spaces, smart home integration, outdoor living enhancements, wellness-oriented spaces, multigenerational living solutions, bold and unique kitchens, luxury bathrooms, energy-efficient windows and insulation, vintage and retro aesthetics. Open layouts that maximize space and natural light remain popular. Many homemakers are incorporating flexible spaces that can double as home offices, gyms, or guest rooms to adapt to changing needs. Moreover, renovations often include wellness-focused areas, such as spa-like bathrooms, meditation rooms, and air-purifying indoor gardens, to promote mental and physical well-being.

Impact of COVID-19

The COVID-19 pandemic significantly disrupted the home renovation industry, causing supply chain issues, labor shortages, and project cancellations and delays. Due to limited production and shipping constraints, material costs soared, making renovations more expensive. Social distancing measures and health concerns reduced workforce availability and delayed project timelines. Moreover, economic uncertainty led many homeowners to postpone or cancel projects, shrinking demand and leaving contractors struggling to maintain steady businesses during the crisis.

SEGMENTATION ANALYSIS

By Project

Ability of Professional Contractors to Balance Budget, Quality, and Time Effectively to Drive Growth of Professional Project Segment

By project, the market is bifurcated into DIY (Do It Yourself) and professional.

The professional segment accounted for the majority of the global home renovation market share, with 78.51% in 2024, and is expected to continue its prominent position during the forecast period. Professional renovation projects ensure not only superior quality, expertise, and efficiency but also offer excellent final outputs, especially for complex plans. Professional contractors and service providers brings years of experience, enabling them to work more proficiently and avoid common pitfalls. A seasoned professional contractor can helps with pemits, planning, and handling uncertain issues that may arise during the project, supplementing segment’s growth.

The DIY segment is forecasted to grow at the fastest CAGR between 2025 and 2032. Factors reshaping consumer behavior and industry dynamics include increased accessibility of resources, cost-effectiveness, customization and creativity, social media influence, technological advancement, and eco-conscious trends. Moreover, as a pandemic affected people, many spent more time at home, which motivated them to improve their living spaces and stay productive and creative during lockdowns. 

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By Application

Rising Trend of Aesthetically Designed Spaces to Drive Growth of Interior Renovations

By application, the market is segmented into interior renovations, exterior renovations, energy efficiency, and additions.

Interior renovations dominate the application segment as they directly enhance functionality, aesthetics, and property value. Key interior renovation projects include kitchen upgrades, bathroom remodeling, and living space transformations, driven by changing lifestyle and design trends.

The energy efficiency application segment is poised for strong growth, expected to expand at the fastest CAGR, driven by increasing awareness of sustainability and rising energy costs. With advancements in smart technology and eco-friendly materials, the segment’s growth is expected to accelerate as homeowners opt for energy-saving upgrades, that improve comfort and reduce utility expenses.

By Renovation Type

Rise in Design-Centric Lifestyle and Evolving Consumer Preferences to Drive the Growth of Aesthetic Renovation 

By renovation type, the market is segmented into functional renovation, aesthetic renovation, and value-driven renovation.

The aesthetic renovation segment is expected to grow exponentially at fastest compound annual growth rate (CAGR). The growth of the segment is likely to be driven by a growing focus on customization with personalized spaces and functional beauty, technological advancements such as virtual design tools or smart home integration, and a rise in affluent consumers demanding luxury and premium renovations.

The functional renovation segment dominates the market, holding the largest share in 2024 due to its focus on improving utility and efficiency. Homeowners are seeking upgrades that make their lives smooth. Functionality renovations, such as kitchen remodeling, bathroom upgrades, and energy-efficient systems, transform living spaces into havens of comfort and significantly boost a home’s value.

By Spending Budget

Mid-Range Renovators Segment to Showcase Highest CAGR due to Easy Accessability 

By spending budget, the market is classified into mid-range renovators, high-end renovators, and low-budget renovators.

By spending budget, the mid-range renovators segment is expected to grow exponentially, with the highest CAGR. Many homeowners seek renovations that balance quality and cost. Mid-range projects often provide good value for money, appealing to budget-conscious customers. Besides, in periods of economic uncertainty, mid-range renovators are more accessible than high-end luxury upgrades, making them an attractive choice for a broader demographic. According to the U.S. Houzz & Home Study, 63% of baby boomers renovated their house in 2022, with the majority opting for mid-range renovations.

The low-budget renovators segment occupied the majority of the market share. Low-budget renovation services cater to a broader segment of the population, including middle-and low-income households. Moreover, with rising living costs, many homeowners prioritize cost-effective solutions over luxury upgrades. Low-budget renovators offer value for money without compromising basic functionality and tend to focus less on aesthetics, leading to a larger market share of the segment.

Home Renovation Market Regional Outlook 

Geographically, the market is divided into North America, South America, Europe, the Asia Pacific, and the Rest of the World.

North America

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The North American home renovation industry dominates the global market, with growth driven by aging housing stock, evolving design trends, and growing homeowner investments in sustainability and smart home technologies. Rising remodeling activities in the region are largely focused on kitchens, bathrooms, and energy-efficient upgrades.

Factors such as urbanization, rising property values, and the adoption of remote work have fueled improved spending on home spaces in the U.S. Key trends in the industry include eco-friendly materials, solar panel installations, and smart systems integration.   

Asia Pacific

The Asia Pacific home renovation market is projected to grow at the fastest CAGR from 2025 to 2032. The growth of the market is attributed to increasing disposable income, rapid urbanization, and rising housing demand. As the middle-class population expands, homeowners are prioritizing aesthetic and functional upgrades to improve living standards. Government initiatives promoting sustainable housing and energy-efficient renovations further boost the sector. Additionally, the popularity of smart home technologies and modular interiors appeals to younger, tech-savvy consumers. The region’s aging housing stock also requires modernization, driving demand for renovation services. E-commerce platforms and online design tools make renovations more accessible while growing awareness of wellness-oriented spaces enhances home improvement spending.

Europe

Home renovation market growth in Europe is led by rising interest in sustainability and post-pandemic demand for enhanced living standards. Government incentives for green renovations further boost the sector, making it a dynamic market for both homeowners and industry players.  

South America and the Middle East & Africa

Rapid urban development and a focus on infrastructure modernization are key factors driving the growth of the market in South America and Middle East & Africa. Both regions are witnessing significant investments in real estate and tourism, creating demand for luxury home renovations to attract high-end buyers and tourists. Additionally, the region’s cultural emphasis on home aesthetics, coupled with a growing DIF culture, has spurred demand for home improvement products and services.

Competitive Landscape

Key Market Players

Innovation in Design and Sustainability to Drive the Competition among Market Players

The home renovation market is experiencing robust growth due to increasing consumer demand for personalized spaces, rising property values, and a surge in sustainable remodeling projects. Key players employ various growth strategies to gain a competitive advantage. Companies are introducing innovative solutions such as smart home integration, energy-efficient materials, and eco-friendly options to cater to shifting consumer preferences. Firms are adopting platforms for virtual design consultation, 3D visualization, and project management to enhance customer experience and streamline operations. Furthermore, market leaders are acquiring smaller firms and franchising their models to strengthen market presence and capitalize on local expertise.

LIST OF KEY HOME RENOVATION COMPANIES PROFILED

• Power Home Remodeling (U.S.)


• KB Home (U.S.)


• Vinci SA (France)


• ABC Supply Co., Inc. (U.S.)


• Builders FirstSource Inc. (U.S.)


• Larsen & Turbro Ltd (India)


• China State Construction Engineering Corporation (China)


• Skanska AB (Sweden)


• Kohler (U.S.)


• Obayashi Corporation (Japan)

Key Industry Developments

• December 2024: Builders FirstSource, Inc., a prominent player in the Building Products industry, announced the signing of a definitive agreement to acquire Alpine Lumber Company. Through this acquisition, the company has strongly expanded its footprint in the New Mexico and Colorado markets.


• April 2024: ABC Supply Co., Inc. entered into a definitive agreement to acquire Herman’s Supply Company, a trusted supplier of residential and commercial roofing products, siding, and related accessories. This acquisition strengthened ABC Supply’s entry into the Onatrio, Canada market and growth in its New York market.


• October 2023: Great Day Improvements, LLC, a prominent direct-to-consumer (DTC) home remodeling company, expanded its brand portfolio through the successful acquisition of K-Designers, a California-based remodeling contractor. K-Designers being one of the top remodeling contractors in the U.S., specializes in improving curb appeal via services such as doors, windows, patios, siding, and bathroom remodeling. This acquisition enabled Great Day Improvements to make a considerable entry into the California home remodeling market, strengthening its presence in the Western U.S. and continuing its trajectory of growth.


• April 2023: M&M HVAC Services, a solution provider for HVAC, electrical, refrigeration, and general contractor services, announced the acquisition of Sunset Ridge Ecoline Exteriors Corporation, a Wisconsin-based company. This acquisition highlighted  M&M's commitment toward executing its strategic plan and actively seeking opportunities for construction, expansion, and nationwide growth across the U.S.


• April 2023: ABC Supply Co., Inc. completed the acquisition of several specialty distribution businesses from US LBM namely Rosen Materials, Richardson Gypsum, Feldman Lumber, Wallboard Supply Company and Coastal Roofing Supply. The former 4 interior product businesses are to operate under L&W Supply, a subsidiary of ABC Supply while, Coastal Roofing Supply will directly operate under ABC Supply.

Investment Analysis and Opportunities

The home renovation market offers significant investment opportunities driven by growing consumer demand for personalized, energy-efficient, and smart homes. Aging housing stock, coupled with increasing homeownership rates, fuels the need for renovations. Key areas of focus include kitchen and bathroom remodeling, eco-friendly upgrades, and smart home technology integration. The rise of remote work has also spurred interest in home office renovations. Investors can capitalize on trends by targeting innovative product suppliers, home improvement retailers, or tech-driven renovation platforms. Additionally, government incentives for energy-efficient upgrades provide growth potential in green renovation solutions. The home renovation industry is expected to grow steadily throughout the forecast period, making the market an attractive option for strategic, data-driven investments.

REPORT COVERAGE

The market research report provides a detailed analysis of the market and focuses on key aspects such as the competitive landscape, services, and leading product types. It also offers global home renovation market trends and insights and highlights key industry developments. In addition to the aforementioned factors, the report on the global home renovation market outlook includes several factors that have contributed to the market's growth in recent years.

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Report Scope & Segmentation