After dipping to record lows in 2021, residential remodelers across the U.S. experienced a substantial financial rebound in 2024, achieving their highest net profit margins since 1996.

According to the newly summarized 2026 Remodelers’ Cost of Doing Business Study released by the National Association of Home Builders (NAHB) via its Eye On Housing blog, the remodeling sector has seen a robust return to profitability.

For fiscal year 2024, remodelers reported an average of $2.7 million in total revenue. After accounting for operating expenses, these companies retained an average net profit margin of 6.3%, up from 4.7% in 2021 and 5.2% in 2018.

These margin gains reflect a broader structural advantage for the renovation sector, as the NAHB’s Remodeling Market Index has remained highly resilient compared to new-home building sentiment in early 2026, which fell markedly at the year’s start.

According to NAHB’s analysis, the renovation industry’s profitability boost was largely driven by a sharp reduction in trade contractor costs and other sales costs. Specifically, average gross profit margins climbed to a healthy 29.9% in 2024, representing a recovery from 2021’s historic low of 24.9%.

This trend aligns with recent data showing that the annual growth in home repair and material costs has fallen below pre-pandemic norms, easing the burden on remodelers’ cost of sales.

The NAHB attributes this improvement to trade contractor costs dropping from 36% of revenue in 2021 to just 30% in 2024. This brought gross profitability back to levels parallel with the 30.1% margin recorded in 2018.

To contextualize the financial picture, out of the $2.7 million average revenue, roughly $1.9 million (70.1%) went toward the cost of sales, encompassing labor, materials and contractors. Operating expenses — which include indirect construction costs, finance, sales and marketing, general and administrative costs and owner’s compensation — averaged $646,000, or 23.6% of revenue.

Beyond margin improvements, the NAHB data highlights a decade-long trend of remodelers successfully deleveraging their businesses.

Since 2015, the sector’s reliance on debt to finance assets has dropped significantly. Historical data from the study shows that in 2015, 68% of remodelers’ assets were financed through debt. By 2021, that figure had fallen to 49%, and it stabilized at an even 50% in 2024.

Concurrently, the average nominal size of remodelers’ balance sheets has expanded. Average total assets grew by 34% over a three-year period, rising from $497,000 in 2021 to $668,000 in 2024.