Business Insights
Contractors have reason for optimism despite rising costs

Article 5 min read Published June 29, 2026

Home improvement contractors remain optimistic about the industry outlook — and there are clear data-driven reasons behind that confidence. Patrick O’Toole, EVP and co-owner at Qualified Remodeler, shared in a recent Regions Home Improvement Financing webinar that strong demand, profitability, and investment trends continue to support growth across the sector.

Key home improvement trends and contractor success factors

“When I look at the key trends in home improvement right now, it's the money that's flowing into the industry. Firms that are successful in home improvement are typically netting profit of between 10-20% to bottom line,” he said.

That profitability has caught the eye of investors, which is one of several ongoing trends seen by O’Toole, whose brands are some of the most influential media organizations in the industry, and tracks data and trends across the most successful contractors in many verticals.

In the webinar, O’Toole covered other trends and factors successful contractors have in common, which included:

More private equity and private credit entering the industry
Higher lead costs and diversification of lead gen
Strategic partnerships between service providers and manufacturers/distributors
Lead efficiency via AI-powered tools and automation
Having detailed knowledge of their numbers, such as cost per lead, conversion rates at all sales stages, marketing costs, financing usage, and cancellations

These trends highlight how data-driven decision-making, technology adoption, and partnerships can help contractors scale more effectively.

Working through contractor growth challenges

The last trend is one of the hardest for some contractors to let go of, but is critical to taking your business into a higher stage of growth.

“You need to be working on your business instead of in your business,” O’Toole said.

“Business owners often want to stay involved in the day-to-day minutiae, believing they’re the only one in the business with knowledge of certain skills, but it will always limit your growth,” said Heber Smith, AVP, Training Manager at Regions Home Improvement Financing, who hosted the webinar.

“Successful contractors learn to leverage other people in their company, as well as partners like suppliers, manufacturers, or financing companies, so they can free up time to start managing better and focus on growth,” O’Toole said.

The other major challenge top contractors are dealing with is rising lead costs.

Home improvement professionals are facing rising costs for materials and leads, with a range of $600 to -$1,100 per lead.

Customer financing is one way to increase close rates to make the most of the leads.

“The vast majority of the Top 500 are savvy when it comes to utilizing financing in their sales process and it is critically important to growth,” O’Toole said. “Financing is liquidity for the consumer, and it helps you do more with those valuable leads that you've spent hundreds of dollars each to generate.”

Growth trends across top contractor segments

Despite the challenges of rising costs, revenue grew from 2024 to 2025 in all top product categories across the top 200 replacement contractor firms. According to O’Toole: