Home Services Industry in 2025: Exploring the Trends, Benefits, and Challenges
Updated on September 10, 2024
The home services industry might be the most poised market climate right now. Looking to skyrocket at any time and boom! The smartest scope for any starters or new entrepreneurs.
- The current home services industry market is around $485 billion and growing like Hayscented Ferns—18.91% each year (from 2019-2026).
- According to other home services industry statistics, each US household spends above $5K yearly on various home services.
- 98% of individuals consider searching on the internet for home services.
These statistics sketch the potential and ability to push the market anytime. One thing to remember is that home services are increasingly being curled into digital platforms nowadays.
Let’s explore the potential and future opportunities of the industry.
A Closer Look at the Home Services Industry
Now what is home services industry? What home services are? What is home services industry growth?
Let’s not complicate the term.
Any type of services that are dedicated to constructing, building, repairing, or any other maintenance tasks related to your homes and properties are called home services.
Moreover, for a better illustration, the lawn care team you hire that ensures your porch is clean and mowed and offers landscaping is a home services team.
The plumbers who fix leaks and install fixtures are part of the home services industry.
Also, the electricians maintaining your insulation, and fixings fall under home services.
Even the professional home organizers who help declutter and optimize your living space!
Identifying and Classifying Home Services
There is no proper classification within the home service industry. However, home services are often grouped into categories such as:
- Repair and maintenance.
- Cleaning and housekeeping.
- Landscaping and lawn care.
- Installation and construction (like remodeling, appliance installation, etc).
Within these groups, there are also:
- Pest control services
- HVAC (heating, ventilation, and air conditioning) services
- Plumbing
- Home security & automation
- Professional mover teams
- Storage facility providers
- Home decorators
- Roofing services
- Interior designers
- Pool maintenance and repair teams
- Home staging services
- People-focused home service businesses
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🔗Explore features to manage service businessTrends in the Home Services Industry
The US home services industry growth has been monumental in recent times. With this growth, there’s been a heavy shift in trends.
For instance, just a few years back the home services costs per lead was no more than $50 while now it’s more than $100. Also, on Google Ads the costs per click now now gone over $40 per specific home services keyword.
However, there have been some good trends in the market also. Let’s have a further insight into all sorts of trends in the Home services industry.
Increase in online search volume
The online search volume of various home services will keep going up. To find out about local home services 98% of individuals look into online platforms. This trend started during the pandemic in 2019.
Now it has taken a full form. Furthermore, 5.17+ billion people use social media.
No wonder why the home services industry is leveraging these platforms like Facebook, Instagram, TikTok, LinkedIn, and others.
Additionally, homeowners start their search for their home’s repair and renovation needs on these social media platforms including Google, Yelp, and others.
Home Services Industry to charge more
As demand for home services continues to rise, so does the cost of these services.
Accessory Dwelling Units (ADUs) are a sign of that trend. Even though the cost of ADUs is likely to increase from $10-$60 per square foot to more than $100, consumers are undertaking loads of home improvement projects.
Moreover, the kitchen renovation project alone has increased in cost by 20%. According to the report, home improvement spending steadily increased from $371 billion in Q1 of 2021 to $490 billion by Q3 of 2023.
This price hike can be ignited by several factors in the current market climate:
- Material costs
- Labor shortages
- Supply shortages
- Shift in equipment (home services are now turning their head more toward automation)
- Heightened demand for skilled professionals.
As homeowners place greater emphasis on enhancing their living spaces, they are willing to invest more in high-quality, customized services.
This trend is expected to continue, pushing service providers to adjust their pricing strategies to match the evolving market dynamics.
New technologies are taking charge of the home services industry
Did you know that the US smart home market revenue was expected to grow by $38.8 billion in 2024? The growth rate is 9.18% (from 2024-2028)!
This surge reflects the booming integration of advanced technologies into the home services industry.
From smart thermostats and security systems to automated lighting and advanced home appliances, technology is becoming an integral part of home improvement and maintenance.
Service providers are now adapting by incorporating technological advances like IoT-enabled devices, voice-controlled systems, AI-powered analytics & diagnostics, AR & VR, energy management solutions, and others into their work.
Furthermore, 3D printing has generated quite a buzz in the home services market. This technology allows for custom parts and fixtures to be made quickly and precisely. It helps the service providers reduce their time, labor, and overall cost significantly.
This shift in trend from traditional equipment to the latest tech implementation not only meets the growing consumer demand for high-tech solutions but also presents opportunities for businesses in this competitive market.
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🔗 Discover 100+ service business ideasComplexities in the supply chain will affect the prices
Almost all the industries in the US are still recovering from supply chain issues. This has impacted the prices significantly. The home service industry is facing the same issue. And the issue will continue to drive up the prices.
Scenario like:
- The coastal ports are backlogged with cargo ships.
- Failed supply deal renewal with several countries.
- Also, Canadian borders stalled.
- Home repairs are on the rise.
- Not enough production of alternative materials (even items like plywood have been quadrupled due to shortage and lack of alternative options).
The labor shortage has become a factor
It seems like there’s no end to the disruptions in the current home services market! The available labor force like plumbers, designers, decorators, carpenters, electricians, and others have become quite limited in numbers.
According to ManpowerGroup, 75% of employers around the US are struggling to fill the positions of service providers. Until now in 2024, the US labor shortage stands at 70%. This is five percentage points below the global average.
To cope with this trend will be difficult for the industry.
However, some home services industry statistics and reports state the industry is recovering steadily. And the suggestion for you is to don’t make any promises you can’t make with your clients. Be careful in making deadlines. Also, if you are to fall short of the deadline you have no choice but to offer the consumers a little discount in cost to keep them at bay.
Energy efficiency and sustainability concern
The home services industry is more aware of the eco-friendliness of their materials and projects. As US homeowners become more conscious of energy efficiency and sustainability, they are increasingly seeking service providers who can help them lower their carbon footprint.
This trend has led to a rise in demand for eco-friendly home improvements.
Ultimately resulting in demands like:
- Solar panel installation
- Energy-efficient HVAC systems
- Smart thermostats
- Eco-friendly home insulation, etc
These service demands are now more popular than ever. Homeowners are increasingly investing in these solutions to create more sustainable living environments.
Benefits of Seeking Home Services
This part is for the customers. If you need clarification about whether to seek home services or not, you should know that 48 million U.S. homeowners now hold a record $11 trillion in tappable home equity.
This unprecedented level of equity means that investing in home services—whether it's for repairs, renovations, or improvements—can significantly increase the value of your home.
So now you have literally the ability to boost your home’s worth through home services. Looking for further clarifications on the benefits? No worries, while you’re still interested, let’s find out some more benefits for you:
- Saving time and labor.
- Greater choice of flexibility.
- A simpler way to deal with specialized situations.
- Dealing with complicated issues in no time.
- Access to high-quality materials.
- Stress-free and peace of mind.
Challenges in the Home services industry
While the industry is growing at a good pace some difficulties are keeping it at bay. The likes of,
- Management issues
- Promotion of unskilled persons
- Compliance issues
- The pace to match current technological evolution
- Adaptation to customer expectations
- Smooth supply
And many others are hindering further growth of the home services industry. Let’s have a better outlook.
Regulatory and compliance issues
There are some specific rules while collaborating with home service providers. Especially if you are looking to make some home renovation, you’ll have to look for the local code for the improvement. If the renovation plan aligns with the code then the home service providers can carry on to do their work.
Furthermore, federal laws can be a significant burden for home service providers. Non-compliance can lead to penalties and damage to reputation. So both the customers and the home service team need to stay updated and comply with the regulations.
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🔗Explore Service AutomationHindered supply chain
This is a trend in which the US market is still recovering steadily. It has been already mentioned in the trend part. Nowadays, the industry often faces supply chain disruptions that can delay projects and increase costs.
As a result, the limited availability of materials and rising prices are making it difficult to maintain consistent service quality. Most even reported an inability to meet project deadlines.
Inability to keep pace with technological advancements
The rapid evolution of technology is presenting a challenge for many home service providers. Moreover, they are struggling to adopt new tools and techniques. Eventually, it will result in falling behind in the current market climate. Above all, this leads to a competitive disadvantage.
Dynamic customer expectations
The era of millennials is almost at its end. The market is now mostly explored by Gen Zs while millennials and boomers are sitting back. Result– a drastic change in the customer expectations from the home service market.
Also, they are now more informed than ever. They demand higher quality and faster services.
Moreover, Home service providers must continuously adapt to meet these expectations. Failure to do so can result in customer dissatisfaction and loss of business.
Workforce challenges and skill development
The industry is plagued by a shortage of skilled labor. Various reports came forward as many companies have no choice but to promote unskilled workers due to necessity.
This is severely affecting service quality. Customers all around the country are reporting dissatisfaction due to this issue.
So it's a matter of time before the home services industry looks for options to grow the skills of their existing providers. This will ensure that the workforce can handle modern tools and techniques.
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🔗Service Employee TrackingBottom Line
The home services industry is now expanding fast and vastly. But if the challenges are not addressed properly in time– the ball might stop rolling forward.
Furthermore, companies need to keep in mind that this growth is driven by factors like technology, skilled manpower, and innovation. The right focus will help the cause.
You cannot try everything all at once. There needs to be a strategic plan.
Moreover, they need to be adaptive in this competitive market climate. This would drive them to offer better services and options. Keep in mind that– customers benefit from greater convenience, more choices, and access to specialized services.
FAQs about Home Services Business
What home services are most in demand?
The most popular home services include plumbing, electrical repairs, HVAC maintenance, cleaning, landscaping, and handyman work.
These essential services help homeowners maintain and improve their properties.
What is the meaning of home industry business?
A home industry business is a small business run from home or focused on providing services for homes, like cleaning, repairs, or home-based crafts.
It’s all about offering products or services that help with home maintenance or improvement.
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