As we approach 2024, the U.S. Home Services Industry is gearing up for a landmark year. With its market value having surpassed $657 billion, this sector is not only experiencing rapid expansion but is also undergoing a significant paradigm shift to meet the evolving needs of the modern American household.

This blog will shed light on the pivotal trends and burgeoning opportunities within the U.S. Home Services Industry as we edge closer to 2024.

Growth in the U.S. Home Services Industry

The U.S. home services industry has demonstrated remarkable growth, with expectations pointing towards a notable increase in its market size. This expansion is largely fueled by the rising consumer demand for a variety of services that not only meet traditional needs but are also increasingly integrated with advanced technology. 

The ongoing integration of digital platforms, smart home technologies, and eco-friendly practices further propels this growth, as consumers seek convenience, efficiency, and sustainability in their home service choices. This trend reflects a broader shift in consumer preferences towards services that offer greater flexibility, personalized experiences, and a commitment to environmental responsibility, setting the stage for continued expansion and innovation in the home services sector.

Market Size and Growth

According to a report by Technavio, the home services market share is expected to increase to USD 5.14 trillion from 2021 to 2026, with the market's growth momentum accelerating at a CAGR of 36.21%​​. This indicates a strong and steady growth trend for the industry over the next few years, including 2024.

The Surge of On-Demand Home Services Industry

As we look towards 2024, the on-demand segment within the Home Services Industry is poised for unprecedented growth and diversification. This surge is not merely a trend but a fundamental shift in how home services are delivered and consumed. One of the key trends in this industry is the rise of on-demand home services. 

Market Size and Growth

• According to grandviewresearch, the global online on-demand home services market, which is a significant part of the home services industry, was estimated at USD 3.71 billion in 2021. It is expected to expand at a compound annual growth rate (CAGR) of 16.7% from 2022 to 2030, showcasing robust growth. The market size is forecasted to reach USD 14.7 billion by 2030​​​​.

• According to researchandmarkets, this segment is expected to grow at a compound annual growth rate (CAGR) of 49.4% from 2021 to 2028, reaching a market size of $1.7 billion by 2028. The expansion of service offerings in this area includes specialized and niche services such as home cleaning, pet care, and others​​.

#1: Technological Integration

• Mobile and Digital Platforms: The rise of mobile and digital platforms has made it easier for consumers to book and manage home services. This convenience is a major driver of the on-demand model.

• Smart Home Integration: The growing prevalence of smart home technology has created a need for specialized services that can integrate with and maintain these systems

Did You Know

• According to grandviewresearch, the mobile segment dominated the overall market, gaining a market share of 72.0% in 2021 and witnessing a CAGR of 17.1% during the forecast period​​.

#2: Consumer Lifestyle Changes

• Busy Lifestyles: With increasingly busy lifestyles, many consumers are turning to on-demand home services for time-saving solutions.

• Preference for Convenience: There’s a growing preference for services that can be easily scheduled and managed, aligning with the broader trend of convenience in consumer services.

Did You Know

• A research survey from Gartner found that 64% of people believe customer experience is more important than pricing. This underscores the modern consumer's emphasis on convenience and efficiency when choosing home services​​.

#3: Market Growth and Potential

• Expanding Market: The market for on-demand home services is rapidly expanding. By 2024, the global market for these services is expected to grow significantly, reflecting their increasing popularity.

• Diverse Services: The range of services offered in the on-demand model is expanding, from traditional cleaning and maintenance to specialized offerings like high-tech repairs and eco-friendly options.

Did You Know

• According to McKinsey, On-demand home service providers are increasingly offering subscription-based models, with 42% of customers preferring a subscription-based service over a one-time service​​.

#4: Economic and Social Impacts

• Job Creation: The surge in on-demand home services is creating new job opportunities, particularly in areas like tech support, cleaning, and maintenance.

• Support for Gig Economy: This trend is also bolstering the gig economy, providing flexible work options for many individuals.

Did You Know

• According to the Bureau of Labor Statistics, the demand for janitors and cleaners is expected to grow by 4% from 2020 to 2030, faster than the average for all occupations.

• According to a report by McKinsey & Company, 20-30% of the U.S. labor force engages in some form of independent work, including gig work. The gig economy has become a significant contributor to the overall economy.

Challenges in the home services Industry

The home services industry is experiencing several key challenges and opportunities, which are shaping its future:

#1: Labor Market and Job Creation

Retirement of Older Generations: As older generations retire, the industry faces a challenge in attracting newer generations to careers in the trades. As of April, the U.S. construction industry had around 440,000 job openings, the highest levels recorded since industry-level jobs data was first collected​​.

These trends indicate that while the industry faces challenges, particularly in the labor market, there are significant opportunities for growth and innovation, especially in the realm of on-demand services and technology integration.

Stats and Facts for The U.S. Home Services Industry

Let's delve into some specific statistics and facts that highlight the current landscape and trends in the U.S. home services industry. These insights can provide a deeper understanding of the sector's dynamics:

• A 2022 report indicated that over 80% of home service businesses now utilize digital tools for scheduling and customer management, a significant increase from just a few years prior.

• Online platforms and apps have seen a 150% increase in usage for service bookings compared to pre-pandemic levels.

• Surveys show that nearly 70% of consumers prefer eco-friendly home services, emphasizing the importance of sustainability in the industry.

• Subscription models for home services have gained popularity, with approximately 40% of urban households in the U.S. opting for regular, subscription-based home maintenance services.

• The industry currently faces a skilled labor shortage, with over 50% of home service businesses reporting difficulties in finding qualified workers.

• Investment in training and certification programs has increased by 25% among home service providers, aiming to address this skills gap.

• Smart home technology integration in home services has seen a 35% increase year-over-year, reflecting growing consumer demand for tech-savvy home solutions.

• Automation and AI integration in service management and customer interaction are up by 20%, enhancing efficiency and customer experience.

• Niche services, such as allergen-free cleaning and high-tech appliance maintenance, have seen a growth of approximately 30% in demand over the past year.

• Partnerships between home service providers and real estate firms have surged by 40%, particularly for pre-move-in and post-move-out services.

These statistics and facts paint a picture of a rapidly evolving industry, influenced by technological advancements, changing consumer preferences, and the need for skilled labor. The home services market in the U.S. is not only growing but also adapting to the demands of a modern clientele, opening up new opportunities for businesses and service providers.

Cleaning Industry: A Sector to Watch in the Home Services Industry in 2024

As we head towards 2024, the cleaning industry in the Home Services Industry is witnessing substantial growth, driven by several key factors:

• Projected Growth Rate: The industry is expected to grow by 20% annually, highlighting its increasing importance in both residential and commercial sectors.

• Rising Household Adoption: It's projected that by 2024, around 80% of U.S. households will be utilizing professional cleaning services, a trend reflecting the growing preference for convenience and efficiency in home maintenance.

• Specialization and Niche Services: There's a noticeable shift towards specialized cleaning services, such as eco-friendly and allergy-reducing options, catering to specific needs and spaces, including offices and healthcare facilities.

• Technology Integration: Advancements in cleaning technology, including automated equipment and environmentally friendly products, are improving the efficiency and sustainability of cleaning services.

• Impact of Health Awareness: Heightened awareness about health and hygiene, especially post-pandemic, has significantly boosted the demand for regular and thorough cleaning services to maintain healthy living and working environments.

• Commercial Sector Opportunities: The commercial cleaning sector is expanding, driven by businesses' need to maintain hygienic workspaces for employees and customers.

• Employment and Entrepreneurial Opportunities: The growth of the cleaning industry is opening up numerous job and business opportunities, contributing to economic growth.

These factors combined indicate that the cleaning sector is set to be a key area of growth and innovation in the home services industry, addressing the evolving demands of both residential and commercial clients.

Most In-Demand Services in the U.S. Home Services Industry in 2023

Based on the latest market research and industry insights, several services within the Home Services Industry have been identified as particularly in-demand in 2023. These services are likely to continue being popular in the near future:

#1: Cleaning Services

• Routine Cleanings

• Deep Cleaning

• Specialized Services (e.g., Carpet Cleaning, Move-In/Out Cleanings)

#2: Landscaping Services

• Aesthetic Design

• Functional Outdoor Spaces

• Dominated by Local Businesses

#3: Pest Control Services

• Ants, Roaches, Termites

• Bed Bugs

• Home and Health Protection

#4: Plumbing Services

• Leak Repairs

• Pipe Maintenance

• Emergency Solutions

#5: Electrical Services

• Wiring and Circuit Repairs

• Safety Inspections

• Electrical Installations

#6: HVAC Services

• Heating and Cooling Maintenance

• Ventilation Systems

• System Replacements

#7: Home Security Services

• System Installations

• Monitoring Services

• Enhanced Home Protection

These services highlight the diverse needs of homeowners and the dynamic nature of the Home Services Industry, catering to aspects ranging from comfort and functionality to safety and aesthetics.

Expected Most Demanding Services in the U.S. Home Services Industry in 2024

Several services in the Home Services Industry are expected to be particularly popular in 2024:

#1: Home Restoration

Due to an increase in natural disasters, there's a growing need for services that restore homes damaged by water, fire, smoke, or other elements. The home restoration and renovation industry, particularly for older homes, continues to be in high demand​​.

• The global restoration services market is predicted to reach approximately $50.60 billion by 2026, with a compound annual growth rate (CAGR) of 4.5%.

• The residential remodeling market size was estimated at $512.01 billion in 2022 and is expected to grow at a compound annual growth rate (CAGR) of 4.4% from 2023 to 2030 

#2: Cleaning Business

• Cleaning services remain essential for both homes and businesses. The residential cleaning industry is expected to see a 20% annual growth, with 80% of households projected to use house cleaning services by 2024. Source Onedesk

• The commercial cleaning industry is also expected to grow significantly, producing over $468 billion in revenue by 2027​​.Source Onedesk

#3: Home Improvement

Approximately 80% of American households are predicted to need handyman services at least once a year. The demand for these services is steady, driven by the need for maintenance and repairs in aging homes​​. Source Futuremarket

#4: Lawn Care

The lawn care industry, with its estimated annual growth rate of 5.1% between 2022-2027, reflects the ongoing importance of outdoor home maintenance. Homeowners continue to seek expertise in lawn health, fertilization, and irrigation​​. Source HIRI

#5: Property Management

Despite economic challenges, property management remains a robust sector. With over 35% of U.S. households renting homes, the demand for property management services is strong and expected to continue growing​​.

These services highlight the diverse and evolving nature of the Home Services Industry, catering to a wide range of residential needs and preferences.

US Global Home Services Industry by Segment

The U.S. home services industry can be segmented as follows:

#1: By Service Type

• Cleaning and Maintenance (USD 370.56 billion in 2022)

• Repair and Renovation (USD 512.01 billion in 2022)

• Lawn Care and Landscaping (USD 50.03 billion in 2023)

• Security and Smart Home Installation (US$ 7.5 billion in 2023)

#2: By End User

Residential Segment

• The U.S. home services market, including the residential sector, is substantial, with a total addressable market of $657.4 billion​​.

• The home improvement market alone is now $475 billion and grew by 26% in the past year (2022 to 2023)​​.

• Specifically for single-family houses, the total home service market is valued at $500.2 billion​​.

• The market in total project volume consists of 665.6 million projects completed annually, with year-over-year increases in both improvement projects and emergency projects​​.

• Residential Franchise Services have a public revenue/EBITDA multiple of 4.24x / 23.9x. This includes companies offering home-based services directly or through their franchise network, covering a range of services like pest control, remediation, HVAC, and landscaping​​, according to corporatefinance

• Residential Non-Franchise Services have a public revenue/EBITDA multiple of 1.62x / 8.6x, comprising companies offering interior and exterior building products, insulation, home improvement and repair, and related services​​, according to corporatefinance

Commercial Segment

• The commercial home services market faces a mixed outlook for 2023. In 2022, only 30% of contractors in this sector saw an increase in revenue, and only 37% saw an increase in profits​​, according to servicetitan

• About 66% of contractors consider digital transformation important to their operations, with about 30% having already incorporated artificial intelligence (AI) into their processes​​, according to servicetitan

• For 2023, 30% of contractors expect their revenue to stay the same, 30% hope for an increase, and 40% fear a decrease​​, according to servicetitan

Industrial Segment

• The industrial services market is expected to grow by USD 14.58 billion between 2023 and 2028, progressing at a CAGR of 6.06% during the forecast period​​.

• The market is anticipated to observe a 5.67% year-over-year growth in 2024​​.

#3: By Operations

On-Demand Services

• The global online on-demand home services market was estimated at USD 3.71 billion in 2021, with expectations of expanding at a compound annual growth rate (CAGR) of 16.7% from 2022 to 2030​​.

• In 2022, the market value was about $4.09 billion and is forecasted to grow to $4.66 billion in 2023, representing a CAGR of 13.8%​​.

• More than 70% of Americans have engaged in home improvement projects since the onset of COVID-19, with further growth planned for 2023. The industry is expected to see a 53% growth between 2020 and 2024​​.

• Specifically, the U.S. on-demand home services market is estimated to reach $1.57 billion by 2027, with a projected CAGR of 49% from 2020 to 2025​​.

Contract-Based Services

• The U.S. home services market, which includes contract-based services, is expected to grow by approximately 10% in 2023 despite various macro-economic challenges​​.

• The industry was forecasted to increase by around $62 billion (10.4%), from $595 billion in 2021 to $657 billion in 2022​​.

Emergency Services

The total project volume for the home services market, which includes emergency services, accounted for 665.6 million projects completed annually. This figure represents a year-over-year increase in both improvement and emergency projects​​.

#4: By Geography

Urban Areas

• Urban areas, accounting for 80.0% of the U.S. population, are likely to dominate the home services market in terms of demand and revenue. This is due to the higher population density and the variety of housing types, which leads to a diverse range of service needs.

• Rapidly growing urban areas like Austin, Raleigh, and Orlando might experience particularly strong growth in the home services sector.

Suburban Areas

• These areas are characterized by a predominance of single-family homes, which generally require a wide range of maintenance and improvement services.

• The demand in suburban areas might be driven by factors like family size, homeownership rates, and the desire for home improvement and renovation

Rural Areas

• Rural areas, making up 20.0% of the U.S. population, might have a smaller but still significant market for home services. The nature of services in these areas could be more specialized, catering to the needs of rural living.

Regional Differences

• The Western and Northeastern regions of the U.S., being more urbanized, might see a higher concentration of home services demand in their urban and suburban areas.

• The South and Midwest, with a slightly lower percentage of urban population, might have a more balanced distribution of services across urban, suburban, and rural areas.

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