Is 2026 the Right Time to Scale in the Home Services Business Sector?

Yes—2026 can be a strong year to scale a home services business, provided the plan aligns with a slow‑but‑positive demand trajectory, policy tailwinds in energy efficiency, and persistent constraints in labor and financing that favor operational excellence and disciplined capital deployment. Put simply, the environment supports thoughtful growth rather than reckless expansion, with remodeling spending projected at record levels even as growth rates remain modest and uneven across categories and regions.​

What 2026 looks like

The leading U.S. remodeling benchmark anticipates homeowner improvement and repair outlays to be near record levels, with year‑over‑year growth projected in the low single digits by mid‑2026 after stabilizing in 2025. NAHB’s remodeling sentiment remains in positive territory, and industry forecasts call for solid gains in 2025 and more modest—but still positive—growth in 2026. Macro projections suggest a cooler but stable economy, with GDP growth around the high‑1 percent range in 2026 and policy rates drifting toward the mid‑3 percent area, implying financing conditions that improve gradually from 2024–2025 peaks without a return to ultra‑cheap capital.​

Bottom line

If the business has the systems, cash flow discipline, and talent pipelines to execute, 2026 offers a favorable window to scale around service lines tied to equipment replacement, energy upgrades, and “improve‑don’t‑move” consumer behavior, while avoiding overextension in discretionary projects highly sensitive to financing costs. The opportunity is strongest for operators who can leverage incentives (tax credits and rebates), navigate HVAC refrigerant and efficiency transitions, and differentiate with speed, financing options, and digitally enabled customer experiences.​

Demand outlook

Harvard’s LIRA projects slow but steady growth into 2026, with year‑over‑year spending rising into early 2026 before easing slightly later in the year, keeping total expenditures near record highs. Trade coverage of the LIRA emphasizes that spending may reach the mid‑$500 billion range by early 2026, reinforcing a narrative of stabilization rather than a boom or bust. NAHB’s Remodeling Market Index (RMI) remained above the neutral 50 threshold through 2025, signaling positive sentiment despite quarterly fluctuations and macro headwinds.​

Housing drivers

NAHB cites aging housing stock, substantial home equity, and favorable demographics as durable demand foundations for remodeling through 2025 and into 2026. “Improve over move” remains the dominant consumer mindset under higher mortgage rates and limited inventory, a pattern reflected in Angi’s State of Home Spending data. As existing‑home sales recover in fits and starts, associated make‑ready and post‑purchase projects typically follow, contributing to steady improvement activity rather than cyclical surges.​

Macro backdrop

The Federal Reserve’s September 2025 Summary of Economic Projections shows median GDP growth of approximately 1.8 percent in 2026, with PCE inflation expected to cool toward the low‑2 percent range by 2027–2028, and the fed funds rate drifting lower but remaining positive in real terms. That profile implies a gradually improving financing climate for consumers and operators, but not a wholesale reversion to the ultra‑low rate era that supercharged pandemic‑era home improvement. The upshot is steady demand for essential and value‑oriented work, with sensitivity persisting around large discretionary projects that depend on promotional financing and home equity borrowing costs.​

Policy tailwinds

The federal Energy Efficient Home Improvement Credit under Section 25C runs through 2032, providing 30 percent credits up to 2,000 dollars annually for qualifying heat pumps and other high‑efficiency upgrades, alongside additional caps for other measures. ENERGY STAR and IRS guidance underscores the availability of 30 percent credits up to 2,000 dollars for eligible air‑source heat pumps per year, reinforcing a multi‑year replacement and upgrade cycle that benefits HVAC, electrical, and weatherization trades. DOE’s Home Energy Rebates programs (HOMES and HEEHRA) are rolling out state‑by‑state through 2025–2026, with many states launching phased programs or pilots, creating incremental demand for efficiency projects as administrative capacity ramps.​

HVAC refrigerant shift

EPA’s Technology Transitions Program restricts higher‑GWP HFCs beginning in 2025 for new residential and light commercial equipment, pushing the market toward A2L refrigerants like R‑454B and R‑32 in new systems. NAHB guidance notes that residential and light commercial AC and heat pumps manufactured after January 1, 2025, must use new refrigerants, with a sell‑through period enabling installation of pre‑2025 equipment through 2025 and into early 2026 depending on the category. OEMs and industry sources describe the change as a manageable but meaningful transition that requires updated training, tooling, and safety protocols, with operators who adapt early positioned to capture replacement demand and trust.​

Consumer behavior signals

Jobber’s 2025 reports show digital payment adoption hitting record levels and revenue resilience via larger average invoices and modest price adjustments despite uneven scheduling volumes, highlighting a shift toward professionalized, tech‑enabled service delivery. Angi’s 2024 report indicates homeowners reduced overall project counts and shifted toward essential upkeep while maintaining substantial spending, with a large majority planning projects in 2025 that carry into 2026. Combined, these patterns suggest pricing discipline, upselling, and frictionless customer experiences will continue to drive growth even if job volumes fluctuate.​

Labor remains tight

Associated Builders and Contractors estimates the construction industry must attract approximately 439,000 net new workers in 2025 to meet demand, underscoring persistent skilled‑labor scarcity that will carry into 2026. Labor tightness tends to elevate wage pressures and elongate cycle times, rewarding operators with apprenticeships, career ladders, and strong recruiting funnels tuned to local market realities. Expect labor bottlenecks to remain a central constraint on scaling capacity, especially in HVAC and electrical roles that intersect with policy‑driven upgrade demand.​

Where the opportunity is strongest

• HVAC system replacements tied to A2L transitions and 25C‑eligible heat pump upgrades should present durable demand, particularly when bundled with panel, wiring, and weatherization where rebates and credits stack.​

• Electrification‑adjacent work (heat pump water heaters, dryers, induction readiness, ventilation, and panel upgrades) aligns with rebate pathways as more states activate programs through 2025–2026.​

• Value‑oriented remodeling and repairs that enhance function, efficiency, aging‑in‑place, and maintenance will likely outpace luxury discretionary projects in a higher‑for‑longer rate regime.​

  
  

Where caution is warranted

• Large, highly discretionary projects financed with unsecured loans remain sensitive to rate and credit conditions even as macro projections stabilize and may lag value and efficiency projects.​

• Regions with slower housing turnover or weaker administrative progress on rebates may see uneven demand timing, complicating near‑term capacity planning and lead management.​

• Scaling field capacity faster than recruiting and training can support risks service quality and warranty costs in a tight labor market, eroding reputation and margins during a pivotal transition period.​

  
  

Scale now or wait

Scaling in 2026 makes sense when the plan leans into replacement cycles, energy efficiency incentives, and digital operating leverage rather than speculative demand for luxury projects dependent on cheap financing. If talent pipelines, cash conversion cycles, and installation readiness for A2L equipment are secure, expanding serviceable territory and adding crews can compound ROI as incentives and homeowner intent align. If labor, training, or capital readiness are weak, a measured approach that builds recruiting, apprenticeship, and rebate administration capabilities in early 2026 may yield better outcomes by late 2026 into 2027.​

A 2026 scaling playbook

• Build an incentives engine: Train CSRs and comfort advisors to pre‑qualify prospects for 25C eligibility and state rebates, document qualifying SKUs, and streamline paperwork so customers experience rebates and credits as part of a single, guided “buy now” flow.​

• Win the A2L transition: Certify techs on A2L handling, update tools and safety protocols, and coordinate with OEMs for onboarding, stocking, and install SOPs, then market “A2L‑ready” system replacements and tune‑ups.​

• Monetize digital convenience: Lean into instant financing approvals, e‑sign, and digital payments to reduce friction and increase close rates as homeowners increasingly expect seamless digital experiences.​

• Prioritize essential value: Package maintenance, IAQ, weatherization, and small‑to‑mid replacement options that fit monthly budgets and maximize incentives, reinforcing “improve over move” value propositions.​

• Operational discipline: Focus on install quality, first‑time fix, truck stock optimization, and warranty cost control as modest demand growth puts a premium on profitability per crew day.​

  
  

Team and training

The 2025–2026 environment rewards firms that elevate training, field supervision, and tech enablement to counterbalance labor scarcity and technical change in HVAC and electrification. Apprenticeship pathways and cross‑training (e.g., HVAC techs trained on basic electrical scopes for heat pump installs) can raise scheduling flexibility and margin per job. Tie performance pay to first‑time‑fix rates, callback reduction, and customer satisfaction to prevent quality slippage during crew growth.​

Marketing and demand generation

Angi’s data shows homeowners are still doing projects, but with fewer jobs and a focus on essentials, which puts the burden on targeting, differentiation, and frictionless fulfillment to win a larger share of constrained demand. Jobber’s insights highlight that revenue resilience came from larger average invoices and bundling, suggesting campaigns should emphasize packages and energy‑savings ROI instead of one‑off ticket chases. Align messaging with incentives, A2L readiness, and immediate scheduling availability to capture high‑intent searches and referral traffic.​

Financing and pricing

With policy rates projected to ease but stay positive in real terms, offer multiple financing tiers, including promotional options for essential replacements, to offset consumer sensitivity and keep approvals moving. Maintain pricing discipline by bundling upgrades, leveraging rebates and tax credits in total cost‑of‑ownership framing, and protecting gross margin with clear scope and change‑order practices. As inflation cools toward target, avoid reflexive discounting that undermines the ability to invest in talent and training during the refrigerant transition.​

Risk management

• Demand risk: LIRA indicates modest, steady growth with potential softening late‑2026, so build plans that can flex up or down one crew per territory without destabilizing service levels.​

• Policy risk: State‑level rebate programs are uneven in timing; design offers that work with or without rebates to prevent pipeline stalls.​

• Execution risk: Refrigerant transition and labor scarcity raise the cost of callbacks; invest in QA, commissioning checklists, and post‑install inspections.​

  
  

Metrics to monitor

Track NAHB’s RMI for sentiment trendlines, and Harvard’s LIRA for spending directionality as early warning signals for pacing territory expansion or adding crews. Within the business, watch close rate by financing option, average invoice tied to incentive‑eligible SKUs, first‑time‑fix, and install‑to‑call ratio to ensure scale is accretive to margins. Monitor state rebate activation and funding burn rates to plan targeted campaigns timed to local availability.​

Category notes

• HVAC: Prioritize A2L‑ready replacements, heat pumps eligible for 25C, and panel/wiring coordination to capture whole‑home system wins in markets with active rebates.​

• Electrical: Electrification readiness—panels, wiring, ventilation, and appliance circuits—will be pulled along by heat pump adoption and rebate design.​

• Remodeling and handyman: Emphasize essential repairs, energy‑efficiency upgrades, and aging‑in‑place improvements aligned with stable but modest growth expectations.​

• Cleaning and green services: Jobber data shows resilience via bundling and price adjustments; maintain recurring models and cross‑sell seasonal upsells.​

  
  

Regional dynamics

States with earlier and clearer rebate program launches should see stronger electrification and efficiency demand pull‑through, impacting HVAC and electrical workloads more quickly. Areas with older housing stock and higher home equity—per NAHB’s framing—should continue to sustain remodeling and repair activity, particularly where moving remains expensive or impractical. Be prepared for pockets of softness where administrative rollout lags or existing‑home sales volumes remain lower, flattening project backlogs intermittently.​

Leadership checklist for 2026

• Talent: Build apprenticeship cohorts now and elevate field supervision to protect quality during crew growth in a scarce labor market.​

• Tech stack: Expand digital payments, finance integrations, and capacity‑aware scheduling to convert intent into revenue efficiently.​

• Compliance: Align inventory and SOPs to A2L requirements, and market the firm’s readiness as a trust signal.​

• Incentives: Operationalize 25C and state rebates in proposals, scripting, and fulfillment to reduce friction and boost close rates.​

• Financials: Pace growth against LIRA and RMI signals, safeguarding margins and cash conversion as rates normalize slowly.​

  
  

Conclusion

For well‑run operators, 2026 is an attractive window to scale into essential replacements, energy‑efficient upgrades, and digitally enabled service models, with macro stability and incentives providing a supportive—if not euphoric—backdrop. Success will hinge on readiness for A2L transitions, the ability to recruit and train amid labor scarcity, and turning incentives and financing into seamless customer experiences that compound win rates and margins as demand grinds upward.​