Home Remodeling Activity Points to Market Balance

Home renovation activity continues to hold steady, with the Canadian Home Builders’ Association (CHBA) reporting a neutral score of 50.3 in its spring Renovation Market Index (RMI).

This is up slightly from 48.3 in late 2025.

The newly launched RMI is a sentiment indicator that assesses current renovation activity, expectations for the next six months, and the level of client inquiries and project pipelines. It is designed to provide early insight into renovation spending trends and the outlook for the health of Canada’s home improvement sector.

Regional RMI results continued to mirror what renovators reported in the fall 2025 edition and what new home builders are reporting on sales conditions through CHBA’s Housing Market Index.

Atlantic Canada recorded the strongest result, with a mildly optimistic score of 62.6. The Prairie provinces remained just inside neutral territory at 59.2. Meanwhile, Ontario fell six points from the previous RMI to 40.1 — the lowest score of any region — and is edging closer to pessimistic territory. British Columbia did not fare much better, posting a score of 43.1.

Renovators reported significant variation across project types. Renovations involving three or more interior rooms were in neutral territory, with a score of 54, while projects involving one or two interior rooms were considerably more optimistic at 65.

Conditions were weaker for exterior projects. New additions scored 39, while exterior envelope and landscaping projects came in at 42. Accessory suites, both attached and detached, were the most pessimistic renovation category, with a score of 29. This likely reflects the current state of new home construction, as well as the relatively small size of the accessory suite market compared with other renovation segments.

Meanwhile, retrofit and repair work remained in neutral territory, posting a score of 59.

Like last fall’s inaugural survey, project backlogs remained a concern for renovators. Only 13 per cent of respondents said their backlog was longer than average, while 41 per cent said it was shorter.

Respondents who reported shorter backlogs were asked why. They overwhelmingly pointed to consumer uncertainty, saying homeowners are more reluctant to move ahead with projects or are scaling back to the original scope of planned renovations. Notably, there was no mention that shorter backlogs were due to current projects being completed faster.

CHBA also asked renovators whether they or their subcontractors had laid off workers due to market conditions over the past year. About one-quarter of respondents said they had maintained their headcount, while 20 per cent reported permanently laying off workers. A separate 16 per cent said they had rehired, or planned to rehire, workers who had previously been laid off.

Overall, these responses point to normal labour market churn rather than the level of employment stress currently being reported by new home builders.

As a slow-growth industry that generally expands in line with Canada’s aging and growing housing stock, nominal residential renovation output has remained largely unchanged at roughly $80 billion annually since 2023.

At the same time, labour, material and regulatory costs continue to rise, increasing the cost of doing business for renovators. Feedback from renovators suggests the three per cent year-over-year increase reported by Statistics Canada‘s Residential Renovation Price Index understates the actual increase in project costs.

After adjusting for inflation, real GDP for residential renovation activity fell 1.6 per cent to $51.3 billion in the first quarter of 2026 from Q1 2025 — roughly the same level recorded in 2013. The spring RMI suggests renovation investment will grow by less than one per cent this year, lagging the broader economy.

Clare Tattersall is an interior designer and decorator in Toronto, and the editor of Canada’s floor covering magazine, Coverings and Home Goods Merchandiser.