CEDIA’s latest Professional Smart Home Market Analysis report values the residential integration market at nearly $34 billion and finds that integrators remain optimistic about growth despite economic pressures on homeowners.
The findings were presented at Monday’s CEDIA Town Hall at CEDIA Expo 2026. The study, conducted with the Farnsworth Group, collected 287 responses from residential technology professionals, compared with 65 responses for CEDIA’s previous study.
The research found that larger integration firms account for a disproportionate share of the market. Networking was among the largest categories, representing about 15% of the overall market.
There’s also a challenging housing backdrop. Single-family housing starts declined last year and are expected to fall again this year, while declining permits suggest continued pressure on new construction.
Existing homes offer a better opportunity. The average U.S. home is about 44 years old, supporting continued demand for repair, maintenance, and remodeling.
At the same time, homeowners are reluctant to move. About half of mortgage holders have rates below 4%, while home values have increased significantly, giving homeowners substantial equity but little incentive to sell.
Economic concerns remain a major obstacle. Declining disposable income, higher debt, and weak consumer confidence are affecting spending on discretionary projects. “The money didn’t leave, but it is certainly concentrated,” said Farnsworth Group’s Grant Farnsworth.
Additionally, the research found that the top 20% of U.S. households by income account for roughly half of all home improvement spending, making affluent homeowners an important market for custom integrators.
Despite economic uncertainty, about eight in 10 respondents said they expect their businesses to grow over the next 12 months, citing increased demand as the primary reason.
About 75% of projects originate directly with the homeowner, rather than through a general contractor, designer, or architect. Lighting ranked as the leading growth opportunity, followed by AI integration, new products and diversification, shades, and home automation. Networking was the most widely installed technology, with 88% of respondents reporting a networking installation during the past year. However, project cancellations and postponements have increased during the past two quarters, suggesting that even affluent homeowners are becoming more cautious.
The CEDIA Professional Smart Home Market Analysis will be released on Sept. 16 and is free for CEDIA members.
