Remodeling Labor Landscape Worsening, HIRI Asserts

Industry group cites notable shift for the worse in supply, quality, and cost of labor despite strong homeowner demand

Jan. 28, 2026 at 10:07am

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The Home Improvement Remodeling Institute (HIRI) reports that the residential remodeling industry is facing a 'notable shift for the worse' in the labor landscape, with the supply, quality, and cost of labor all worsening over the past several quarters. However, a majority of surveyed contractors (57%) still anticipate revenue growth in 2026, suggesting cautious optimism as market conditions begin to settle.

Why it matters

The remodeling industry's labor challenges, including availability, quality, and rising costs, are impacting homeowner demand and the types of projects being undertaken. While homeowner demand remains 'surprisingly strong', many are hesitant to take on large, high-end remodels and are instead focusing on essential maintenance and lower-risk projects.

The details

According to HIRI, labor availability, quality, and cost remain pressing issues, with quality rivaling availability concerns. Rising costs also dominate material concerns, followed by availability and quality pressures, underscoring persistent supply chain strain. More than half of surveyed firms (53%) report facing more competition than a year ago, although this marks 'a stabilizing trend' compared to previous quarters. Market pessimism is stabilizing, but prospects for growth hinge largely on efficiency and the effective use of technology.

  • The report from the Home Improvement Remodeling Institute (HIRI) was released on January 28, 2026.

The players

Home Improvement Remodeling Institute (HIRI)

An Indianapolis-based industry group that provides research and insights on the residential remodeling market.

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The takeaway

The remodeling industry's labor challenges, including availability, quality, and rising costs, are forcing homeowners to be more cautious in their home improvement projects, with many opting for essential maintenance and lower-risk projects over large, high-end remodels. However, the industry remains cautiously optimistic, with a majority of contractors anticipating revenue growth in 2026 as they focus on efficiency and technology to navigate the persistent headwinds.