The home services industry is constantly evolving, and as the home services market is poised to grow in the upcoming years, data helps business owners, operators, and leaders stay informed.
At Valve+Meter, we help home service business owners separate trends and statistics from relevant data that helps your home services business stay ahead of competitors and generate your share of consumer spending. In this article, we’ll delve into 24 key home services industry statistics that you need to know in 2023, from market growth and customer preferences to emerging technologies and challenges.
Overview of the Home Services Industry
The home services industry encompasses dozens of primary services and hundreds of more specialized services. A simple definition of the home service industry is all businesses that provide services to homeowners and renters. Most of these services focus on the care of the property including maintaining and repairing the infrastructure and decor of the homes, structures, and property.
Some of the most rapidly growing home service providers offer care to people and their family in their homes. This includes very general care like childcare and personal shopping as well as high specialized care from healthcare providers and educators.
Home Services Industry Segments
The home services market can be broken down into several segments. The home service market includes recurring services and on demand services. Because of the segmentation of home service businesses, a comprehensive list of every type is nearly impossible. In fact, the home service industry’s rapid growth and change means new businesses and segments are being created every year.
There are a number of primary home service providers that are very recognizable and account for a great share of the home services market. These businesses include:
- Cleaning services – This segment includes common housekeeping, exterior cleaning, window washing, carpet cleaning, junk removal, and other services that clean and maintain property.
- Landscaping and lawn care – Property management includes grass mowing, turf care, hardscape, arborists, gardeners, landscape architecture, fences, and any home service business that cares for the exterior property.
- Pest control – Preventing bugs, insects, rodents, and other pests from invading property is always in demand. Home service businesses in the pest control industry can offer highly specialized service to stand out in this highly competitive landscape.
- Plumbing – A primary home service market are services that care for the infrastructure within homes. Plumbing home service providers install, maintain, and repair all pipes, appliances, and fixtures that control the delivery and removal of water from property.
- Heating ventilation and air conditioning (HVAC) – Another staple of the home services market is HVAC. These home service businesses install, repair and maintain indoor air including furnaces, air conditioners, heat pumps, and other systems that heat and cool indoor spaces.
- Electrical – Complete installation of new electrical systems and appliances is key to the home service industry. New construction and home improvement projects need safe and reliable electrical systems. With the electrification of roadways and new technologies transforming the smart home, electricians are poised for future growth.
- Home improvement – General contractors, painters, roofing, flooring, handymen, carpenters and other professional home service business professionals fall into this category. The home service industry market share is significant for home improvement. The latest industry trends so continued consumer spending increases in home improvement.
- Interior design – This segment includes a large group of businesses that are closely adjacent to home improvement. However, interior design may include furniture designers, interior decorators, bespoke craftsmen, and the portion of the home services market that sells products as well as services.
Industry Growth And Trends
The home services industry has experienced steady growth over the past few years, fueled by factors like the rise in homeownership, the aging of the housing stock, and the increasing demand for convenience and personalized services. The vast majority of consumers searching for home service businesses start with an online search. To compete in the digital marketing landscape, home service business owners must study and understand the available data to maximize return on investment.
Key Home Services Industry Statistics
Market Size And Revenue
1. The global home services market is expected to reach $1.2 trillion by 2026, growing at a CAGR of 9.3% between 2021 and 2026.
2. In the US, the home services industry generated approximately $600 billion in revenue in 2022.
3. Cleaning services account for about 30% of the total market revenue, while landscaping and lawn care make up 20%.
4. According to ResearchAndMarkets, the demand for home services is expected to grow by 49.4% between 2021 and 2028.
5. The fastest-growing segment in the industry is home improvement and interior design, with a projected growth rate of 14% during the same period.
6. The home services industry employs over 5 million people in the United States alone. The HVAC industry itself employs more than 500,000 people in the US.
7. Employment in the industry has grown by 13% since 2019, outpacing the overall labor market growth.
Online Presence and Digital Marketing
11. According to a report by Invoca (citing LSA), over 55% of consumers run an Internet search before scheduling a home services appointment.
12. 80% of home services businesses use social media for marketing and customer engagement.
13. According to LocalIQ, for paid search advertising, the average cost per lead ranges widely. For example, air conditioning services average CPL is $55.15, plumbing is $48.91, roofing is $101.49, and landscaping is $38.47.
14. The same study indicated that display advertising and social advertising had higher cost per lead than paid search. For example, air conditioning services display ads have a CPL of $160.77 and the average CPL for social ads is $62.80.
15. 45% of customers discover home service providers through social media.
Reviews And Ratings
16. More than 90% of consumers read online reviews before choosing a home service provider. In addition, according to PowerReviews,
17. Businesses with an average rating of 4 stars or higher on review platforms receive 32% more revenue compared to those with lower ratings.
Customer Demographics and Preferences
Age And Income
17. The majority of home services customers fall into the age group of 35-54 years old, with a median annual income of $75,000.
18. Millennials, aged 25-34, represent 27% of the customer base for home services, and they tend to prioritize convenience and digital interactions.
19. Urban areas account for 65% of the demand for home services, while suburban and rural areas make up the remaining 35%.
Preferred Service Providers
18. 60% of consumers prefer to work with local, independent service providers rather than large chains or franchises.
Emerging Technologies in the Home Services Industry
19. Over 50% of home services businesses offer a mobile app for customers to book and manage services, and this number is expected to grow in the coming years.
Internet Of Things (IOT)
20.The adoption of IoT devices in the home services industry, such as smart thermostats and security systems, is expected to increase by 28% by 2026.
Artificial Intelligence (AI)
21. AI-powered customer service chatbots are becoming increasingly popular in the home services industry, with 40% of businesses planning to implement AI solutions by 2025.
Challenges and Opportunities in the Home Services Industry
22. The home services industry faces a labor shortage, with 46% of business owners reporting difficulties in finding skilled workers.
23. The industry is highly fragmented, with over 90% of businesses being small, local operations, making competition fierce for market share.
24. As consumers become more environmentally conscious, 75% of home services customers prefer businesses that use eco-friendly practices and products.
The Future of the Home Service Industry
These statistics culled from recent years help business owners understand the potential growth opportunities and challenges facing the home services market. In order to capture market share, many home service providers are innovating through smarter marketing efforts. Performance marketing attaches data to every marketing campaign. The data follows each strategy from concept to closure. By measuring results, homes services marketing costs per lead can be validated. At Valve+Meter, we have proven data driven marketing for the home services market. We also work with businesses to research, plan, execute, and test cutting edge marketing for the home services market. Only the most effective strategies are repeated and scaled so the acquisition cost of customers is reduced. Lower cost lead generation and higher quality lead conversions helps business owners earn their share of the home services market.