The home service industry is set to experience significant growth in 2025, driven by a recovering housing market, rising consumer confidence, and a historic increase in digital payment adoption. Key insights from the latest Home Service Economic Report: 2024 Review and 2025 Outlook reveal critical economic trends that are catalyzing momentum within this sector.
Recovery and Key Market Drivers
As consumer demand rebounds amidst economic uncertainties in 2024, businesses have adapted by adjusting pricing strategies and increasing job sizes, despite a decline in the number of scheduled jobs. The 5.8% increase in single-family home prices in Q4 2024 has encouraged homeowners to invest in renovations and repairs.
The expansion of new housing construction has also reflected a growing demand for home service professionals, with a notable surge in housing starts at the end of the year. Additionally, digital payments have become increasingly prevalent, with nearly 50% of transactions completed digitally in 2024—a figure projected to exceed 50% in 2025.
“This report sheds light on how businesses have adeptly navigated changing consumer demand through the effective use of digital tools and strategic pricing in 2024,” a spokesperson remarked. “While concerns about inflation and interest rates persist, our findings suggest a rebounding demand for home services, positioning entrepreneurs for substantial growth and success in 2025.”
Performance Across Segments
The report highlights trends across essential home service segments, including Green, Cleaning, Contracting, and Construction.
- Green: This sector, which encompasses lawn care and landscaping, experienced fluctuations in 2024, marked by a spring dip in scheduled work followed by a resurgence later in the year. Revenue remained stable as businesses compensated for reduced job volumes by offering higher-ticket services.
- Cleaning: Covering both residential and commercial cleaning services, this sector faced a slowdown in scheduled work but saw recovery in the latter half of the year, with pricing adjustments helping to maintain revenue growth.
- Contracting: Professionals such as electricians, plumbers, and HVAC technicians struggled with new work scheduling in early 2024, but reported a rebound later in the year.
- Construction: Residential and commercial construction faced early-year slowdowns but gained momentum in April and July, ultimately stabilizing—setting the stage for improvement as the housing market continues to recover.
2025 Outlook: Cautious Optimism
Despite encouraging signs, factors like political uncertainty and fluctuating material costs may affect business operations in 2025.
“We maintain a cautiously optimistic outlook for 2025,” a senior executive stated. “Home Service businesses are witnessing an uptick in scheduled work and consistent revenue growth, alongside an increase in digital adoption. However, political instability may impact material procurement for businesses. Overall, the Home Service sector remains a vital component of economic activity in America and is relatively insulated from market volatility.”
As digital transformation accelerates and consumer spending stabilizes, home service businesses are expected to find continued growth opportunities in the year ahead.
