The median American household now spends about $25,000 a year on renovations, repairs and maintenance, up from $24,000 last year. Nationwide, home improvement spending in 2026 reached $511 billion, according to the Leading Indicator of Remodeling Activity, a 1.8% rise from 2025. That is slow next to the double-digit jumps of the pandemic years.
Much of the money is going to fixes, not upgrades. Projects that deal with structural, plumbing or electrical problems made up 45% of work this year, up from 38% in 2024. Nearly 40% of US homes are more than 50 years old. Contractors say 60% of their 2026 jobs involve fixing a problem rather than improving looks.
Where the money goes
Kitchens and bathrooms still take the biggest share at 35% of spending, with kitchen remodels making up 18% of projects and bathrooms 17%. Outdoor living ranks third at 14%. Spending on decks, patios and outdoor kitchens rose 12% this year, and drought-resistant landscaping and automated irrigation gained ground in water-scarce regions such as the Southwest.
Energy efficiency accounts for 12% of the total, up from 9% in 2024, led by solar panels, heat pumps and efficient HVAC systems. Basement and attic conversions come to 8%.
Staying put
Mortgage rates peaked at 7.8% in late 2024 and sit around 6.5% now. Many owners are stuck in homes they might otherwise have sold, so they renovate instead.
Costs are rising on the labor side. The construction industry is short 500,000 workers, labor rates are up 4.2% over the past 12 months, and homeowners wait about 12 weeks for a contractor, double the 2022 wait. Some are turning to do-it-yourself work for smaller jobs.
Typical prices vary. A mid-range kitchen remodel averages $75,000 and a bathroom refresh about $25,000, while window replacements or a new deck usually run $10,000 to $20,000. Homeowners in California and the Northeast pay 20% to 30% more than the national median.
Home equity lines of credit remain the most popular way to pay, with average rates around 8.5%. The Leading Indicator of Remodeling Activity projects 2.5% growth in the second half of 2026 and 3.1% in 2027.
