• Key Insight: Discover how ADU construction activity is diverging sharply across different regions of the country.
• Expert Quote: "...economic uncertainty is making some potential customers hesitant..." — Elliott Pike, NAHB Remodelers Chair
• Supporting Data: Over 62% of surveyed remodelers reporting project costs within the highest price bracket. 

 Overview bullets generated by AI with editorial review.    

In the past seven years, the share of renovation projects remodelers engaged in to create an accessory dwelling unit has grown to one quarter from about one-fifth of the total undertaken, the National Association of Home Builders said.

Supporters of ADU expansion see these as one tool to reduce the housing shortage. For lenders, it is another reason to offer home equity financing products.

The data comes from the third quarter Remodeling Market Index report released earlier in October.

"Remodeling is gaining share in the overall construction market, as it is somewhat less sensitive than new construction to the current elevated interest rates," Robert Dietz, NAHB chief economist, said in the RMI press release.

Approximately 24% of the remodelers who answered the question in the third quarter survey said they are building an addition to be used as an ADU, up from 18% in the first quarter of 2019.

Separately, 23% responded they are doing an ADU construction through the remodeling of an existing space. For the first quarter of 2019, 20% provided an affirmative response to this question.

When digging into the data at the regional level, the Northeast found one-third of the respondents said they built an ADU in the prior 12 months, more than double the 16% in the 2019 query. Meanwhile, 35% were converting an existing space, up from 16%.

The other three regions were a mixed bag of results, with 1 percentage point of remodelers less in the West saying they were doing a new construction ADU and 5 percentage points lower for conversions.

In the South, while 10 percentage points more were doing new construction of an ADU, conversions of existing space were 1 percentage point less.

Cost is another striking change in the data over the seven-year period.

Respondents were able to choose more than one answer to take into account all of the projects they could be working on. In the 2026 survey, over 62% said the project cost $150,000 or more. In the 2019 edition, it was the No. 2 response at 28%.

Next in this year's query was the $100,000 to $149.999 range, cited by 32%; it was the leading response in 2019 at 30%.

Just 13% said the ADU project cost was between $50,000 and $99,999, while 9% indicated it was between $25,000 and $49,999 in the third quarter survey. But in the first quarter 2019, this was cited by 23% and 19%, respectively.

Kukun just unveiled its Renovation - HELOC Index which shows lenders the marketing opportunity for financing options for these projects, which can differ as far down as the ZIP code level.

The NAHB Remodeling Market Index was 62 in the third quarter, up from 61 three months prior and 60 for the same period in 2025.

"Remodeler sentiment remained stable in the third quarter, although remodelers in certain parts of the country continue to report issues with high material costs and finding enough labor to finish projects on time," said NAHB Remodelers Chair Elliott Pike, a remodeler from Homewood, Alabama, in the press release. "Remodelers also report that economic uncertainty is making some potential customers hesitant to move forward with projects."