The U.S. Remodeler Index slipped to 57 in the second quarter of 2026, indicating that professional remodeling activity is still expanding but at a slower pace than a year ago.
Sentiment drops for full‑service and design‑build firms
Full‑service remodelers recorded a sentiment score of 57, down one point from the previous quarter. Design‑build firms fell further, posting a reading of 54 after last quarter’s 58.
Both segments now sit at the 50‑point threshold that separates expansion from contraction, according to the latest Qualified Remodeler and John Burns Research and Consulting survey.
The overall index dropped three points from the first quarter, but it remains modestly above the year‑over‑year level. The survey captured responses from 515 remodelers between June 18 and July 1.
All three components of the index fell. The Current Remodeling Activity Gauge slipped four points to 55, reflecting flat year‑over‑year project completions. The Near‑Term Remodeling Activity Gauge dropped five points to 61, signaling fewer remodelers expect revenue growth in the next three months. The Remodeling Demand Meter edged down to 56, moving the consumer demand metric out of the “strong” range and into “normal.”
Home‑improvement contractors feel the pinch
Home‑improvement specialists—including firms focused on windows, roofing, siding, decking and bathroom replacements—saw their overall index slide from 69 to 62, while the near‑term outlook fell 13 points to 66. Despite the decline, this segment still reported the highest activity among the three remodeling categories.
Project completions remained positive overall. Home‑improvement contractors posted a three‑percent year‑over‑year rise in completed projects, full‑service remodelers logged a two‑percent increase, and design‑build firms completed work that was essentially flat.
Financial expectations also softened. The average forecast for full‑year revenue growth dropped to two percent for 2026, down from four percent in the prior survey. Full‑service remodelers and home‑improvement firms each still anticipate four percent growth, whereas design‑build firms now expect no growth at all.
Related: Sell Land Without the Hassles in North Carolina
Shorter backlogs add another layer of uncertainty. Year‑over‑year backlog lengths fell across all three segments, sitting roughly one to 1.5 months below their 2023 peaks. Longest average backlog sits at 5.9 months for design‑build firms, followed by full‑service remodelers at four months and home‑improvement contractors at three months.
Consumer behavior is shifting. Demand among luxury and premium homeowners improved slightly, while mid‑tier and value‑oriented customers showed weaker ratings. Homeowners with stronger finances continue to move ahead with projects, but middle‑market buyers are more likely to postpone work, scale back scope, or opt for less expensive materials.
One‑third of remodelers reported that customers are choosing lower‑grade or lower‑priced products, with cabinets being the most frequently affected category. Homeowners appear willing to sacrifice material quality, durability and brand reputation to keep costs down.
Cost pressures remain significant.
Materials costs keep rising. Suppliers reported price increases ranging from about four to eight percent year over year across major product lines, with windows, cabinets and HVAC equipment seeing some of the steepest hikes. Labor expenses rose roughly ten percent compared with the previous year.
Consumer uncertainty topped the list of obstacles, cited by 51 percent of respondents. Rising building‑material costs were named by 35 percent, skilled‑labor shortages by 30 percent, and tariffs by 24 percent.
Despite the softer outlook, there are still pockets of demand. Homeowners who prefer to renovate rather than relocate continue to drive activity, especially for additions, aging‑in‑place upgrades, accessibility projects and accessory dwelling units. Regionally, the strongest remodeling conditions were reported in the Southeast, the Midwest and Texas.
While the index’s decline reflects broader economic strains, the data also suggest that the remodeling market retains resilience in certain niches. The ability of contractors to adapt to tighter budgets and shifting consumer preferences may determine how quickly sentiment recovers.