US homeowners spend more than half a trillion dollars a year improving, maintaining and repairing their homes. The Joint Center for Housing Studies of Harvard University tracks this with its Leading Indicator of Remodeling Activity (LIRA). In its July 2026 release, it put annual spending at $517 billion in the second quarter of 2026 and projected $519 billion by mid-2027.
The headline is a slowdown. Growth is expected to cool from 2.1% to just 0.5% a year by the second quarter of 2027, below the rate of inflation. Harvard ties this to weak home sales: people tend to remodel when they buy or sell, and fewer homes are changing hands.
For a new business, that slowdown matters less than it sounds, as long as you choose the right side of the market.
Two very different markets
Discretionary remodeling covers kitchens, additions, finished basements and upgrades. These jobs are large, depend on homeowner confidence and home sales, and are the first to be postponed when budgets tighten.
Repair and maintenance covers broken furnaces, leaking pipes, failing water heaters, storm damage and the jobs on every homeowner’s to-do list. These are much harder to postpone. A household that cancels a kitchen remodel still calls someone when the air conditioning fails in July.
In a slow remodeling market, businesses built on repair, maintenance and recurring service contracts are better protected than businesses that depend on big projects.
The trades shortage is your opening
Skilled trades are hard to hire for, which keeps prices firm for those who can do the work. HVAC is a clear example. The Bureau of Labor Statistics reports a median wage of $61,010 for HVAC technicians in May 2025 and projects jobs to grow 8% from 2024 to 2034, much faster than average. About 440,900 people held these jobs in 2025.
For an owner, this cuts both ways. Customers will pay for reliable, licensed work, but your own hiring will be competitive. Many successful small trade businesses start as an owner-operator, then add one technician at a time.
Best entry points for a small business
| Business | Startup cost | Why it works now |
|---|---|---|
| Handyman service | $3,000 to $15,000 | Small repair jobs keep coming even when big remodels stall |
| HVAC service company | $40,000 to $120,000 | Essential repairs plus recurring maintenance plans |
| Pressure washing and exterior cleaning | Under $10,000 | Seasonal, but quick to start and easy to sell door to door |
| Specialty remodeling (bathrooms, flooring) | $25,000+ | Higher tickets, but most exposed to the slowdown |
Startup costs are Advanton estimates covering tools, a work vehicle, insurance and licensing. Get local quotes before you budget.
Licensing and rules
Every state sets its own rules. Many require a contractor license above a certain job size, and plumbing, electrical and HVAC work usually needs a trade license. Anyone who handles refrigerants must hold EPA Section 608 certification. Check your state licensing board before you advertise, because unlicensed work can void your insurance and leave you unable to collect payment.
Our take
The remodeling boom is over for now, but home services are not going anywhere. Focus on work homeowners can’t postpone, sell maintenance plans to turn one-off jobs into recurring revenue, and make licensing and insurance your selling point rather than an afterthought. Harvard publishes a new LIRA every quarter, and we update this page when it does.
Ready to start? Follow the Start a Business A–Z guide.
Sources
- Joint Center for Housing Studies of Harvard University, Leading Indicator of Remodeling Activity (LIRA), July 2026 release, via Woodworking Network
- Inman, Harvard JCHS remodeling outlook, May 2026
- US Bureau of Labor Statistics, Heating, Air Conditioning, and Refrigeration Mechanics and Installers
- US Environmental Protection Agency, Section 608 Technician Certification
Last reviewed October 17, 2026. Startup costs are estimates; check local prices, licensing and tax rules before you commit money.
