Home improvement spending in 2026 is splitting down the middle. The Home Improvement Research Institute’s newest quarterly tracker shows more American homeowners now plan to cut back than to spend more — the first time the balance has gone negative in five quarters. Yet among the households still running projects, average spending more than doubled in a single quarter. The market isn’t cooling evenly: it’s dividing into homeowners who are skipping projects entirely and homeowners who are going big. Whichever camp you’re in, the back half of 2026 looks different than the front half did — and it may quietly be the best window in years for anyone with a mid-size job in mind.
What the New Numbers Show
HIRI’s Q2 2026 Project Activity Tracker, reported by Hardware Retailing, found:
- 30% of homeowners plan to spend less on home improvement over the next 12 months, versus 27% who plan to spend more — the first net-negative reading in five quarters.
- 28% have no project planned at all for the coming year, and the share planning no project of $5,000 or more rose to its highest level in five quarters.
- Despite all that, average spend among active households more than doubled quarter over quarter.
Fewer projects, bigger checks. The casual middle of the market — the $3,000 to $10,000 “we’ll get to it this year” job — is where the pullback is concentrated.
Why the Middle Is Dropping Out
Two forces are squeezing from opposite directions. Labor costs in the trades rose roughly 8–12% over the past year even as material prices flattened, so the same medium-size job simply quotes higher than it did in 2024 — enough to push fence-sitters to “not this year.”
At the same time, homeowners locked into low mortgage rates keep choosing to renovate rather than move, and those renovate-instead-of-move projects are large by nature: kitchens, primary baths, additions. That’s how national remodeling dollars can sit near record levels — a story we covered in our look at 2026’s record remodeling spending — while the number of households actually doing projects shrinks. Big projects are carrying the total.
What This Means for Homeowners
If you have a mid-size project in mind, this is a leverage window. When 28% of homeowners sit out entirely, contractor calendars open up. Fewer competing jobs means faster scheduling and sharper bids — the kind of market where getting three quotes actually produces three different numbers. If you were priced out in 2024 or 2025, it’s worth re-quoting the same job this fall.
Don’t confuse deferring upgrades with deferring maintenance. Skipping the kitchen refresh costs you nothing; skipping the roof patch or the furnace tune-up compounds. We’ve already seen half of homeowners skipping HVAC maintenance this year — a savings strategy that tends to convert a $200 visit into a $2,000 repair. If a system is due, find an HVAC pro near you before the fall rush starts.
If you’re in the go-big camp, protect the budget. Larger projects magnify labor-cost drift, so favor detailed fixed-price contracts over open-ended estimates, and get every allowance (fixtures, finishes) in writing. On a bathroom remodel or kitchen, a vague allowance line is where doubled budgets hide.
The View from Canada
Canada’s renovation economy is running the same split in slow motion. Renovation prices across major markets rose 2.3% over the past year, with wide gaps between cities — and renovations now make up the majority of residential construction investment in the country. Canadian homeowners weighing a project face the same math as their US neighbors: costs aren’t falling, but a quieter booking market is handing committed clients more negotiating room than the headline numbers suggest.
For the Pros Reading This
A splitting market changes how work gets won. The fill-in small jobs that used to pad a slow week are scarcer, while the clients who do commit are committing bigger — which means the schedule goes to whoever answers first and quotes clearest. Detailed, fast, fixed-price bids are converting; slow callbacks aren’t. If your book is thinning, this is the season to widen your service area and tighten your response time, not your prices.
Whether you’re going big this fall or just keeping the essentials on schedule, get real quotes from verified local pros — post your project and let them come to you. Get quotes on MastersGuild
