Scrolling LinkedIn the other day, this post from the NKBA’s Bill Darcy caught my attention. For those that don’t know, Darcy heads up the National Kitchen & Bath Association, which recently partnered with CEDIA on cross-industry research centered on how these very different but often partnering industries can better work together.
Darcy’s post struck a personal note with me, as the current debate with my wife is about whether to move and take on an interest rate that likely doubles, or add an addition to our existing house to make room for our growing family.
We have the coveted sub-3% pandemic-era interest rate, but we have two dogs, a toddler, and are still in a starter home and absolutely need more space. The conversation is currently about renovating and expanding or moving. Staying put and building an addition seems to be the more affordable option.
This very issue seems to also be driving the home-building market. Looking into the NKBA’s research on this a bit more, the figures are pretty telling: repair and remodeling work are leading the way in the kitchen and bath industry, and potentially the larger home building market.
Repair and remodeling is forecast to increase by nearly 3% this year, and professional renovations will rise 4.4%. Meanwhile, single-family new construction will decline nearly 4%.
According to Darcy, 73% of U.S. borrowers hold mortgage rates below 5%, which is mind-boggling given today’s rates.
“So, they’re investing in what they have,” Darcy says.
How does this apply to the custom integration market?
Like any good trade journalist, I immediately thought about how this might apply to the custom integration market. Essentially, are integrators seeing more retrofit/remodel projects versus new homes? The initial thought was, “Well yes, but also no.” Interest rates may as well not exist for wealthy homebuyers, but then again we aren’t talking about starter homes in Central Massachusetts.
According to CE Pro’s 2026 State of the Industry report, the answer largely a mix—at least in terms of where integrators are spending their time and generating revenue.
The data shows that remodeling and retrofit work is not just a piece of the business, but a very substantial one. Nearly 80% of integrators say they serve residential remodeling/retrofit projects, compared to about 92% serving custom new-build homes, indicating that while new construction remains important, retrofit work is nearly as ubiquitous across the channel.
More importantly, when you look at revenue mix, the balance tilts heavily toward existing homes. Nearly 60% of integrators surveyed say 40% or more of their revenue comes from remodeling and retrofit projects, with many clustered even higher, in the 50% to 80% range. Meanwhile, just 55% of integrators say more than 40% of their revenue comes from new custom-built homes.
That aligns almost perfectly with what Darcy is describing on the kitchen and bath side: homeowners aren’t moving, they’re upgrading.
And it makes sense. Unlike new construction, retrofit work often comes with fewer macroeconomic barriers. Homeowners don’t need to secure land, navigate long build timelines, or—most importantly—give up a favorable mortgage rate. Instead, they’re reinvesting in the home they already have, layering in new technology, upgrading legacy systems, and expanding spaces to meet evolving needs.
What does this mean for custom integrators?
For integrators, that shift carries meaningful implications. Retrofit projects tend to be more complex from a design and installation standpoint, but they also open the door to system upgrades, service contracts, and long-term client relationships. In other words, just like in the kitchen and bath world, the smart home industry isn’t waiting for new homes to be built—it’s increasingly building business inside the homes that already exist.
For integrators, the shift toward remodeling and retrofit projects means adapting both strategy and messaging to meet homeowners where they are. Rather than waiting on new construction, integrators should position themselves as experts in upgrading existing homes, developing clear retrofit-focused packages around networking, lighting, control, AV and power while strengthening relationships with remodelers and design professionals who are now key project drivers.
Success in this environment also depends on improving efficiency in lived-in spaces through cleaner installation methods and wireless-first approaches, while using each project as an opportunity to introduce foundational systems homeowners may not have considered. Ultimately, those who treat retrofit work not as a compromise but as a core growth channel, complete with service plans and long-term upgrade paths, will be best positioned to capitalize on this stay-put economy.
