First Half of 2025 Outlook: Home Service Business Edition

Sep 10

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Home services have been seeing an increase in demand in 2025, either from tariff fears of from consumers staying in their houses, but the demands may be eaten up by the increase in material and labor costs.

The first half of 2025 has been a mixed bag for small businesses, especially those in home services like roofing, HVAC, and landscaping. While challenges remain with labor and material costs, steady consumer demand and new tax incentives are creating real opportunities for growth.

Key Takeaways from the Report:

Strong Consumer Demand: Homeowners are investing in upgrades and maintenance, driven by rising home equity and low mortgage rates that keep them in place rather than moving.
Rising Costs: Tariffs on steel, aluminum, and copper are pushing up material prices. Labor shortages continue, forcing many firms to raise wages or pay overtime.
Southern Illinois Growth: Our region has added jobs and seen rising incomes, which means more homeowners have money to spend on home improvements.
Tax Law Changes: The new “One Big Beautiful Bill” (H.R.1) locks in the 20% Qualified Business Income deduction and extends 100% bonus depreciation on equipment—big wins for small businesses.
Energy Incentives: Federal credits of up to $3,200 are available for homeowners making energy-efficient upgrades, a potential boost for contractors in HVAC and related services.

Bottom Line: Demand is steady, but costs are higher. Home service businesses that price smartly, take advantage of tax incentives, and focus on retaining skilled workers are positioned to thrive in the second half of 2025. Download the full report here: