NAHB, October 23: 24% built an ADU addition, 23% converted space into one
In the third-quarter 2026 Remodeling Market Index, NAHB asked whether remodelers started a project involving an accessory dwelling unit (ADU) over the past twelve months. 24% were building an addition for use as an ADU, and 23% were converting existing space into one. Both shares are up from Q1 2019, the last time the question was asked, but most remodelers still did not start an ADU.
The Northeast was the most active region, followed by the West, where at least 27% of remodelers reported each type. The Midwest had the fewest ADU jobs. How remodelers knew the space was an ADU: 71% said the project was a detached structure (up 28 points from 2019), 67% said it had its own entrance and 58% its own kitchen.
The size of the work changed most. 62% of ADU projects cost $150,000 or more, more than double the 28% share in Q1 2019. Part of that is cost: NAHB's Remodeling Input Price Index shows remodelers' input costs up more than 51% from Q1 2019 to Q3 2026.
Why a small contractor should care: an ADU is a small house, not a remodel. At that size one slow payment can leave you carrying tens of thousands of dollars of materials and labor, and permits, utilities and inspections take more steps than a kitchen does.
What to do this week
- 01Before you bid an ADU, call your local building department and ask what it needs for one: setbacks, a separate utility connection, parking, owner-occupancy rules. These differ by city and state.
- 02Write the payment schedule by stage (permit, foundation, framing, rough-ins, drywall, final), so client money arrives before each big material purchase, not after.
- 03If you do not do ADUs yet but do garage or basement conversions, you are already doing half of the work. Show one finished conversion in your portfolio and say "ADU" in your service list.
Where WorkTime CRM helps with this
In Accounting → "Your Finances", the "Cash gap forecast" widget (add it with "+ Add widget") shows, week by week, when a job will run on your own money and how much to ask the client for before that week. It needs a budget on the project's Money tab and an end date on the project.
Comments