New Thumbtack Data Shows Growth of Home Service Businesses in Every State Across the U.S.

Decreased enthusiasm for DIY and a need to renovate instead of relocate is fueling demand

By: Jack Erb, Thumbtack Economist

The U.S. is in an entrepreneurial era. In the last three years, there’s been an explosion in new business formation, with an average of 4.9 million new business applications per year, up from an average of 3.4 million annual applications during the three years prior. At the same time, young adults are showing renewed interest in the skilled trades over traditional office jobs, fueled by flexible schedules and the ability to be their own boss.

And these trends are showing up on our platform as well. We’ve seen a similar nationwide surge in new business openings on Thumbtack with a nearly 40% increase from 2021 to 2023 — including rising numbers in every single state across the U.S.

What’s fueling this growth? This influx of new business sign-ups across the country follows increased consumer demand for projects to fix, maintain, and improve homes (think house cleaning, junk removal, appliance repair, and more). There are several factors at play: sky-high mortgage rates driving people to stay in and upgrade their current homes, an aging housing stock in need of repairs and renovations, and return-to-work initiatives that result in less time at home to tackle DIY projects. There’s a clear need for more help at home, and luckily, new businesses are popping up to fill that void.

At the same time, the data also shows a broader trend in home services, an enormous $600 billion dollar industry that’s been slow to move online. As homeowners increasingly desire services at the click of the button — businesses are evolving to meet their needs by joining the Thumbtack platform.

2023 Fastest Growing Cities & States for New Home Service Businesses on Thumbtack

We took a look at our data to see where these new home service businesses are setting up shop. While cities like Atlanta, New York, Los Angeles and Chicago remain top of the list for most new pro sign-ups over the past year, we saw some smaller cities experience an influx of new business as well.

Here’s a peek at both the top overall and fastest growing cities for new home service business sign-ups in 2023:

Cities With the Most New Home Service Business Sign-ups:

1. Atlanta (GA)
2. Philadelphia (PA)
3. New York (NY)
4. Los Angeles (CA)
5. Chicago (IL)
6. Tampa-St.Petersburg (FL)
7. Boston-Manchester (MA)
8. Miami-Fort Lauderdale (FL)
9. Dallas-Fort Worth (TX)
10. Houston (TX)

Cities with the Biggest Year over Year Increase in New Home Service Business Sign-ups:

1. Harrisburg-Lancaster-Lebanon-York (PA): +149.3%
2. Tri-Cities: Bristol, Kingsport, Johnson City (TN): +91.5%
3. Gainesville (FL): +85.3%
4. Lubbock (TX): +78.6%
5. El Paso (TX): +65.4%
6. Youngstown (OH): +59.2%
7. Macon (GA): +52.1%
8. Mobile-Pensacola (FL): +50%
9. Philadelphia (PA): +45.3%
10. Monterey-Salinas (CA): +43.5%

We also took a look at which states are seeing the biggest increase on Thumbtack. Here’s what we found:

States with the Most New Home Service Business Sign-ups:

1. Florida
2. Texas
3. California
4. Georgia
5. Pennsylvania

States like Florida and Texas, which are known for generous incentives and lower taxes, are home to a large share of new businesses joining Thumbtack. Interest in setting up shop in these states could also correspond with a surge of new residents flocking there over the past few years, increasing demand for services.

While some states may be more attractive to small businesses than others, we’re seeing increases across the board from coast to coast. Regardless of location, here’s a look at the trends driving this surge in new business formation nationwide.

2023 Fastest Growing Categories for New Home Service Businesses

As mortgage rates reach some of the highest levels consumers have seen in decades, fewer people are moving. Instead, homeowners are renovating their existing space and investing in proactive maintenance to keep things running smoothly, highlighting their intent to stay put.

Thumbtack’s data shows that new business sign-ups in these areas have followed — with home maintenance and renovation categories seeing some of the biggest year-over-year increase in new businesses on Thumbtack in 2023.

Here’s a look at the categories that have seen some of the biggest year over year increases:

Highest Home Renovation Business Spikes in 2023:

1. Businesses offering Room Remodels (+143.2%)
2. Businesses offering Home Construction Services (+90.8%)
3. Businesses offering General Contracting (+32%)

Highest Home Maintenance Business Spikes in 2023:

1. Businesses offering Sink or Faucet Repair (+205.3%)
2. Businesses offering Plumbing Pipe Installation or Replacement (+88.9%)
3. Businesses offering Water Heater Repair or Maintenance (+88.2%)
4. Businesses offering Appliance Repair or Maintenance (+47%)

DIY is Slowing and Businesses Rush to Fill the Need

As companies call workers back to the office, people are spending less time trying to “do it themselves”. More time commuting means less time at home, and people are opting to outsource tasks they had previously completed themselves — everything from furniture assembly to small repairs and upkeep to cleaning. And we’ve seen thousands of small businesses jumping to fill this gap.

We took a look at the home service categories with the most overall new sign-ups for 2023. Here’s what we found:

Categories with the Most New Business Sign-ups:

1. House Cleaning
2. Handyman
3. Property Management
4. Junk Removal
5. Furniture Assembly
6. Furniture Moving and Heavy Lifting
7. Appliance Repair or Maintenance
8. General Contracting
9. Roof Repair & Maintenance
10. Electrical and Wiring Repair

Advice from the Experts

We are seeing a resurgence of the entrepreneurial spirit. But starting your own home service business isn’t easy. We asked our Thumbtack Pro Advisors what advice they have for other entrepreneurs starting out on their own:

“When starting your own business I wish someone told me to put job details into a contract and make sure that the communication is clear throughout the entire interaction with customers. Make sure you document every job, even the smallest ones, to protect you and your business. Remember that it is your name and company being presented and you want to be prepared and professional.” — Shaqueal Thomas, owner of Courteney Paints

“In order to survive and thrive in business and especially as an early stage entrepreneur, you need to focus on sales. Sales keeps a business afloat, sales help a business grow and sales help maintain an entrepreneurial dream. Logos, equipment, software systems and every other aspect of your business could be top notch but when it comes down to it, the most important aspect of your business is the ability to sell yourself and your service/product.” — Daniel Jones, owner/CEO Junk Miners

Interested in learning more about what it takes to start your own home services business? Check out Thumbtack’s upcoming Tools of the Trade Mentorship Sessions where top pros from Thumbtack share advice for starting your own home service business.

*Methodology:

Year-over-year percentage and volume changes in new business sign-ups are based on hundreds of thousands of new pro sign-ups on Thumbtack in January-September 2022 and January-September 2023. Corresponding year-over-year percentage changes in project requests are based on projects submitted by customers on Thumbtack in H1 2022 and H1 2023.