2025 Was Lumpy, 2026 Will Reward the Prepared

If I had to describe 2025, I’d call it a lumpy year. Not a bad year. Most of the companies I’m engaged with actually did just fine, and in some cases had record results. But it did not feel fine week to week. It was peaks and valleys. Two or three weeks where the phone rang and everyone felt optimistic, followed by two or three weeks where things went quiet and clients hit pause. That kind of unevenness is harder to navigate than a straight downturn, because you can plan for slow and you can plan for hot. What’s hard is staffing and scheduling, and keeping your team steady, when the market swings.

The big lesson from 2025 is that uncertainty isn’t something you wait out. It’s something you learn to operate inside. Going into 2026, the winners won’t be the firms that guess the market perfectly. They’ll be the firms that master uncertainty and tighten their process around speed, clarity, and follow-through.

The last two years in plain English

To understand 2025, I like to rewind briefly to 2024. Coming out of the post-COVID surge, a lot of us were watching the dust settle on multiple fronts. I remember a fair amount of consensus heading into 2024 that it was going to be a year of uncertainty. Presidential election dynamics, global issues, the constant noise in the environment. Homeowners might have been doing fine financially, but the world around them made them nervous, and that shows up immediately in consumer confidence. When we moved into 2025, I looked at some of the data, including the LIRA (the Leading Indicator of Remodeling Activity), and it was pointing positive, not negative. I thought, “Okay, maybe the dust is settling.” My early theme for 2025 was that it could be a year of mastery.

Then we got into the year and realized uncertainty was not done with us. It kept playing. So my theme shifted: 2025 became a year of mastering uncertainty. If you’re a remodeler reading this, I’m not telling you anything you didn’t live. What I am telling you is that the ability to operate inside this environment is now a competitive advantage. It’s a muscle. The firms that built that muscle in 2025 are going to benefit from it in 2026.

Big revenues, mixed signals

One of the more useful things I do each year is listen to what’s happening across different markets, not just my local zip code. When you step back, the headline is strong. Many firms posted good results. When you zoom in, you see why owners keep describing the year with words like “hard,” “wonky,” and “lumpy.” Consider a few snapshots I’ve been hearing from operators around the country:

• A Mid-Atlantic remodeler projected its best first nine months on record, with net margins near 10%. Still, the president noted a thinner design backlog after a weak second quarter. Lead volume returned, but the company is preparing for turbulence by leaning more on high-margin handyman work.
• In the specialty sector, an East Coast replacement contractor was up 11% year over year, but marketing costs cut into margins. Their perspective was important: demand hasn’t disappeared, it has shifted. Homeowners are more intent on value, transparency, and trust.
• A Midwest design-build firm closed 2025 a comfortably north of 2024 revenue and expects more modest growth in 2026. Appointments were down 4%, but strong closing rates and targeted marketing kept the pipeline healthy.
• A Northern California design-build firm is finishing its best year ever, beating its revenue goal by double digits. But the president gave a blunt warning about 2026 backlog: “We’re falling off the cliff next year.” Larger projects are taking longer to develop, and too much design-phase work isn’t converting fast enough.
• A Central U.S. full-service firm saw a 35% sales increase driven by stronger closing rates and surging demand for small projects, particularly exteriors. Profits are strong even though the company intentionally kept its pace under control, which held revenue a bit behind target.

These aren’t isolated stories. A theme cut across market segments: homeowners are still investing, but more cautiously and often at smaller scopes. Replacements, handyman, and small exteriors showed up again and again as top performers.

Another theme is that local conditions are still uneven. Some markets are running well. Others are choppy. In a few places, there are discomforting signals. For example, a Michigan design-build owner noted that trades have begun laying off staff for the first time since 2008. “Homes are up for sale and nothing’s selling,” the owner said. “Homeowners are talking about projects but not continuing the conversations.” In the Washington, D.C., area, a firm described a tough stretch tied to federal disruption. “We’ve had to work 25% harder to make a little bit less,” the CEO said. That same firm is expanding into the Chesapeake Bay region with projected additional revenue of $3 million, which tells you something important. Strong operators still invest and still find growth lanes, even when the environment is not friendly.

Most of the people I speak with describe 2026 outlook as cautious optimism to moderate concern. A minority expect a decline greater than 3%. Unpredictability remains the industry’s biggest challenge. Even among those expressing caution, the consensus remains clear. The fundamentals are strong as long as consumer confidence holds.

Homeowners are ready to remodel, but time is the enemy

Here’s the good news that gets lost when the market feels noisy. Homeowners, especially those doing major remodeling, generally have the means. One data point I’ve referenced comes from Cleveland Research: roughly 80% of homeowners doing major remodeling say they’re better off now than they were two or three years ago. That matters. It means the issue isn’t whether they can remodel. It’s when they decide to move forward, and how long that decision takes. In an uneven market, time is not your friend. The longer a homeowner sits in uncertainty, the more likely fear, confusion, or inertia will take over. That’s why the best-performing firms in 2025 were relentlessly focused on reducing time friction: faster response, tighter sales processes, and quicker clarity.

There’s another shift happening that remodelers must internalize. Homeowners enter the decision process later than they used to. Twenty-five years ago, homeowners were often only about 20% of the way through their thinking when they called a remodeler. Today, they’re often 80% of the way through. They’ve done the research while watching Netflix. They’ve looked at inspiration photos. They’ve compared ranges. When they contact you, they’re not shopping for ideas. They’re looking for confidence. So speed and clarity are not “nice-to-haves.” They are conversion tools.

2026 forecast: growth is taken, not given

I do believe 2026 is a year of growth. I’m not saying it will be smooth. I’m saying the companies that lean in, intentionally and thoughtfully, are going to gain market share. The companies that hunker down with their tail between their legs, freeze marketing, and avoid investment because uncertainty feels uncomfortable are going to slide backwards. Growth in 2026 will be taken, not given. That doesn’t mean reckless spending. It means disciplined growth, driven by a few fundamentals:

• Stay visible in your market.
• Build “client for life” relationships.
• Diversify work so you’re not dependent on one project type.
• Treat operations as a growth engine, not a back-office function.

The strongest firms I see pair long-term vision with short execution cycles. They know where they want to be in ten years, but they run the business in tight, focused quarters. And here’s a line I repeat because it’s true: growth doesn’t come from a single lever, it comes from an operating system. Marketing matters, but so does what happens after the lead comes in. Training matters, but only if it shows up in execution. Technology matters, but only if your team uses it. Operational excellence is what turns demand into profit.

You don’t make your money on what you sell. You make your money on what you build, and how consistently you build it.

Sales in an anxious market: pivot, don’t change

When it comes to the sales process, I don’t think most companies need to blow it up. What they need is to pivot, not change: one- and two-degree adjustments that match the reality homeowners are living in. There is a lot of anxiety out there. Not irrational anxiety, just cautious decision-making. Homeowners are navigating interest rates, moving costs, inflation, and general uncertainty, plus the daily disruption a remodel creates. Your job isn’t to pressure them. Your job is to help them decide on the best path forward.

That means you become the voice of reason. And the key word there is reason. You weave logic into the process. You bring data into the conversation, not to scare homeowners, but to ground them. Here are a few examples of how “reason” works in the real world:

• If a homeowner is debating moving versus remodeling, remind them of the cost of moving. The act of moving is commonly 10% to 20% of the cost of the new home once you factor commissions, moving expenses, transfer fees, and the money they put into prepping the old house for sale.
• If they are frozen because of pricing, remind them what delay actually costs. Remodeling inflation has been significant—in the 10% to 20% per year range in recent years. That’s real money.
• If the homeowner is fixated on tariffs, contextualize it. Tariffs were a major talking point in early 2025, but for many companies they represented roughly 3% to 5% of a project’s cost. Delaying a year can easily cost more than that.

The remodeler down the street is not your biggest competitor. Your biggest competitor is fear, ignorance, and overwhelm. If you help the homeowner buy, instead of trying to sell them, you will win more often. Two other pivots I think matter in 2026 are patience and selling down. First, be more patient. There’s herky-jerkiness in the market. Don’t judge the book by the cover too early. Let the leash out further than you would normally. Second, sell down. After years of cost escalation, many homeowners need help right-sizing. The best firms treat value engineering and phasing as relationship-building tools. It’s better to reshape the scope and keep the relationship intact than to watch the project die because the homeowner is overwhelmed.

Disruption is the silent deal-killer

When people think about homeowner objections, they often default to cost, timeline, or “shopping bids.” But one of the most important concerns homeowners have is disruption to daily life. Not just dust and noise. Disruption to time, routines, travel, work, and family bandwidth. I work with a group that asks every client an unusual question: “How much space do you have in your life for this project?” It creates a pause, and then it opens a useful conversation. Because the reality is, working with a professional remodeler might require one to two hours a week of homeowner time. Trying to coordinate it yourself can require ten to twenty hours a week.

That is a massive difference, and it reframes your value. You’re not just building a kitchen. You’re managing decision fatigue. You’re reducing the hours a homeowner must spend coordinating trades, answering questions, and worrying about what’s next. I’ve felt this personally. When a project requires constant supervision, it changes your life. It can keep you from taking trips. It can hijack your schedule. That’s disruption. If you want to sell effectively in 2026, address disruption directly, early, and credibly. Some firms are good at communicating this with analogies. One salesperson told me they describe professional design-build as a fine dining experience versus buying ingredients and cooking the meal yourself. It doesn’t mean one is morally better. It means they’re not the same, and the time cost is real.

Technology and AI: not optional, and not just tools

AI is moving faster than anyone anticipated. What took the internet 20 years to mature, AI is doing in about two. But the biggest challenge with AI isn’t picking the right tools. It’s preventing an internal divide between the people who embrace it and the people who avoid it. If only one or two team members are experimenting while everyone else stays hands-off, you lose the compounding benefit. The companies getting real value from AI treat it as a cultural shift. They encourage experimentation and normalize learning. Even 20 or 30 minutes a day adds up quickly.

The cost compression is dramatic. I’ve seen a company that used to spend roughly $2,300 to $2,400 per video. With AI-enabled workflows, they’re producing comparable content for $200 to $300. That changes the economics of marketing and communication, especially in a year where staying visible matters. AI is also changing the speed of decision-making in design. If you can show a client, in the moment, what cabinets look like to the ceiling versus a soffit, what inset versus overlay does, what blue versus white feels like, you reduce stress. You move the decision forward. And time kills deals.

I’ll add one more thought that sounds simple, but it matters. Don’t only make technology a tool. Make it fun. If the homeowner enjoys the journey, the likelihood they continue the process and stay engaged goes up. Business is a game. Games are fun. Bring that energy into your process.

Run the business on a 10-year vision and a 12-week execution cycle

A habit I want more remodelers to develop is a healthier relationship with planning. Many firms obsess over a one-year plan, as if the world is stable enough to reward that obsession. Yes, you need a budget. Yes, you need a plan. But don’t fall in love with the plan. I remember reading years ago, I think it was Jim Collins or one of the major authors, that there are two timeframes leaders should hold at once: a 10-year timeframe and a 3-month timeframe. That resonates in remodeling because the world is unpredictable. The 10-year horizon gives you vision: where you’re heading, what you care about, your values, and your purpose. The 12-week horizon gives you execution: what you will accomplish this quarter, how you will measure it, and what you will adjust.

I think of it like driving. You need to see the mountains in the distance, but you also need to see the exit in a quarter mile. If you focus only on the hood of the car, you crash. If you focus only on the horizon, you miss the traffic jam right in front of you. Stack great quarters on top of each other and you will build a business that grows even when the environment is lumpy.

Build the business you can eventually leave

Finally, 2026 is a good time to zoom out. Many remodeling leaders are aging out of their businesses. Some have transitions in place. Others are hanging on without a clear plan. I’m a big believer that you should plan your transition ten years out if you can. If you don’t have ten years, plan it five years out. Most remodeling businesses are not truly saleable—not because they aren’t profitable, but because too much of the business lives in the owner’s head. For many full-service remodelers, the most realistic path is internal succession.

A line from a very successful friend stuck with me: “I’m looking for someone to fire me.” That mindset is the key. If you want to transition, you need the next generation in place. That requires mentoring, systems, and a deliberate shift of your time and energy toward developing leaders who can run the business without you. 2025 forced remodelers to adapt. The firms that did are stronger for it. In 2026, growth will belong to the remodelers who reduce friction, move faster, communicate more clearly, and embrace tools that make life easier for both homeowners and teams.

Uncertainty isn’t going away. But if you build an operating system that thrives inside it, you don’t have to fear it. You can take market share in it. And you can build a business that is not only profitable but fulfilling.