A Fragmented Home Improvement Market Poised for Growth in 2026

Home improvement is a massive and stable market, now firmly above $500 billion of annual spend. Importantly, while the category benefited from stay-home mandates during COVID-19, the baseline for spending has structurally reset higher since the pandemic as homeowners spend more time in their homes, invest in existing housing stock, and face limited turnover in the housing market. The pull-forward many feared coming out the pandemic appears to be sticky, meaningfully resetting category spend to well above pre-COVID levels.

Despite its large size, the home improvement market remains highly fragmented. The majority of operators are small, local businesses with low employee counts and limited scale, and the number of participants in the market continues to grow. This fragmentation creates a compelling backdrop for professionalized operators with brand, operations, and technological advantages to acquire and scale profitably, making them better positioned to deliver on what increasingly matters to homeowners, according to a new industry report released by the Consumer & Residential Services investment banking team at Brown Gibbons Lang & Company (BGL).

As the category has grown, so has the number of operators. The number of remodeling companies has nearly doubled over the past 25 years, from fewer than 69,000 in 2000 to more than 128,000 by 2025, reflecting the expanding fragmentation of remodelers in the residential remodeling sector.

Remodelers now represent a majority of residential building construction companies, about 56% as of early 2025, while homebuilders make up a smaller share. This is a notable shift from the mid-2000s boom period when remodelers accounted for ~38% of the market and homebuilders dominated, including new single-family and multifamily general contractors as well as speculative home builders.

Led by Patrick Gillin, BGL’s Consumer & Residential Services investment banking team brings deep experience partnering with leading operators across the direct-to-consumer home improvement and route-based residential services sectors. Our team has the investment banking and capital markets experience to advise clients across the full spectrum of financial advisory services, including M&A advisory, capital markets activities, and strategic assignments.