The 2026 Home Service Opportunity Index: Where Demand Beats Supply by Trade and State
The 2026 Pipeline Opportunity Index ranks Michigan, Arizona, and Pennsylvania as the highest-opportunity states for home service contractors, combining 1.29 million BLS-tracked workers across 5 trades with Census housing data and NOAA climate normals. Markets with old housing, severe climate, and low contractor density score highest. Idaho, Wyoming, and Montana score lowest due to saturation.
Key Takeaways
- Michigan ranks #1 for opportunity in 3 of 5 home service trades, with 0.35-0.58 contractors per 1,000 housing units
- Arizona, Nevada, and Texas show the strongest HVAC opportunity scores driven by 4,608 cooling degree days in Phoenix alone
- New York has just 0.10 roofing contractors per 1,000 housing units against 73% pre-1980 housing stock
- Idaho, Wyoming, and Montana are the most saturated markets across multiple trades, with 1.3+ contractors per 1,000 housing units
- California has the lowest HVAC opportunity index (0/100) due to dense supply against newer housing in milder climates
Michigan plumbing and HVAC contractors operate in a market with 6,136 annual heating degree days, 61% pre-1980 housing stock, and just 0.58 contractor establishments per 1,000 housing units. That combination puts Michigan at index 28 on the Pipeline Opportunity Index, fourth-highest in the country for plumbing and HVAC after Hawaii, Arizona, and Nevada.
We built this index because nobody else has joined the three datasets that actually matter for home service contractor strategy: BLS Quarterly Census of Employment and Wages for the supply side, Census American Community Survey for housing demand, and NOAA Climate Normals for the regional weather pressure that drives HVAC, plumbing freeze risk, roofing damage, and landscaping seasonality.
The full data file is downloadable: opportunity-by-state.csv (51 states, all 5 trades) and opportunity-rankings.csv (sorted by trade). Every number cites a federal source. The methodology section explains the formula. The trade-by-trade rankings show which states are the most underserved markets in 2026 and which are saturated.
What we measured
The index covers 51 jurisdictions (50 states plus DC) across 5 home service trades: plumbing and HVAC (NAICS 23822, 122,668 establishments), electrical (NAICS 23821, 99,729 establishments), roofing (NAICS 23816, 31,667 establishments), landscaping (NAICS 561730, 123,344 establishments), and janitorial services (NAICS 561720, 83,457 establishments). Total tracked workforce: 4.6 million.
For each state and trade combination we compute three factors. Age factor rewards states with older housing stock, since pre-1980 homes generate more service calls per year. Climate factor is trade-specific: HVAC weights heating and cooling degree days equally, landscaping weights cooling degree days 4x more than heating (longer growing seasons), roofing weights both for storm and freeze-thaw damage. Income factor uses median household income relative to the national median ($81,468) as a proxy for discretionary spend.
Demand Score = housing units × age factor × climate factor × income factor. Supply Density = annual average establishments per 1,000 housing units. Opportunity Index = (Demand / Supply Density / housing units), normalized to 0-100.
Higher score means more demand per existing contractor. It does not mean “more total revenue” - Texas has 9,788 HVAC establishments serving 12.6M housing units and Florida has 10,676 serving 10.6M. Both states are big revenue markets. But contractors in those markets compete against many other contractors. The Opportunity Index measures relative crowding, not absolute size.
DC ranks first in 4 of 5 trades by this formula. We exclude it from the headline rankings below because DC is an analytical outlier: 66% pre-1980 housing, very high income, low contractor count (most DC-area contractors are licensed in MD or VA and serve through there). DC’s index is real but unrepresentative of the surrounding metro economy.
Plumbing and HVAC: where the math points
Plumbing and HVAC opportunity follows two patterns: cold states with old housing where heating equipment ages out, and hot states with new housing where cooling systems work overtime. Both patterns produce high Demand Scores against moderate Supply Density.
| Rank | State | Index | Contractors per 1k housing | Establishments | Pre-1980 housing | Annual HDD + CDD |
|---|---|---|---|---|---|---|
| 1 | Hawaii | 33 | 0.93 | 533 | 48.9% | 0 + 4,628 |
| 2 | Arizona | 31 | 0.89 | 2,936 | 27.9% | 935 + 4,608 |
| 3 | Nevada | 31 | 0.73 | 992 | 20.7% | 1,951 + 3,568 |
| 4 | Michigan | 28 | 0.58 | 2,720 | 61.4% | 6,136 + 803 |
| 5 | Minnesota | 25 | 0.72 | 1,872 | 51.3% | 7,581 + 752 |
| 6 | Florida | 24 | 1.00 | 10,676 | 32.1% | 128 + 4,575 |
| 7 | Texas | 24 | 0.78 | 9,788 | 31.2% | 1,367 + 3,157 |
| 8 | Alaska | 23 | 0.77 | 253 | 36.7% | 10,194 + 0 |
| 9 | Ohio | 23 | 0.65 | 3,486 | 62.0% | 5,250 + 1,034 |
| 10 | Pennsylvania | 22 | 0.73 | 4,254 | 66.3% | 4,612 + 1,301 |
Michigan illustrates the cold-and-old pattern most clearly. The state has 4.67 million housing units, 61% built before 1980, and 6,136 annual heating degree days at Detroit Metro Airport. Against that demand it has 2,720 plumbing and HVAC establishments - roughly one contractor for every 1,716 housing units. That is one of the lowest supply densities in the country among cold-climate states with similar housing age.
Hawaii tops the list for a different reason. Honolulu records 4,628 annual cooling degree days against zero heating demand. Hawaii’s HVAC work is overwhelmingly cooling-side, and its 533 establishments serve 572,824 housing units at 0.93 per 1,000. The Sunbelt pattern (Arizona, Nevada, Florida, Texas) follows the same logic at larger scale.
The opportunity drops sharply at the bottom. California has 12,467 plumbing and HVAC establishments against newer housing stock (only 30% pre-1980 statewide, mostly concentrated in the Bay Area and LA basin) and mild coastal climate. Its index lands at 0. Montana, Wyoming, Idaho, and Oregon round out the bottom 5, all showing 0.85-1.50 contractors per 1,000 housing units against low population density and weaker climate pressure.
Roofing: a Northeast story almost nobody sees
Roofing has the lowest supply density of any trade we tracked. Nationally there are only 31,667 roofing establishments serving 145 million housing units. That is roughly one roofer per 4,587 housing units across the country, before adjusting for climate or housing age.
| Rank | State | Index | Contractors per 1k housing | Establishments | Pre-1980 housing | Annual HDD + CDD |
|---|---|---|---|---|---|---|
| 1 | New York | 48 | 0.10 | 830 | 73.1% | 4,665 + 1,213 |
| 2 | New Jersey | 44 | 0.11 | 406 | 61.1% | 4,870 + 1,190 |
| 3 | Nevada | 41 | 0.11 | 150 | 20.7% | 1,951 + 3,568 |
| 4 | Michigan | 37 | 0.11 | 524 | 61.4% | 6,136 + 803 |
| 5 | Massachusetts | 33 | 0.13 | 406 | 66.2% | 5,681 + 747 |
| 6 | Maryland | 31 | 0.13 | 336 | 50.4% | 4,764 + 1,164 |
| 7 | Connecticut | 29 | 0.15 | 226 | 67.3% | 5,999 + 756 |
| 8 | Minnesota | 28 | 0.15 | 400 | 51.3% | 7,581 + 752 |
| 9 | New Hampshire | 27 | 0.15 | 100 | 50.6% | 7,236 + 452 |
| 10 | West Virginia | 26 | 0.12 | 108 | 54.6% | 4,480 + 1,097 |
New York stands out: 8.68 million housing units, 73% built before 1980 (the highest pre-1980 share in the country), against only 830 roofing establishments. That is one of the most underserved roofing markets in America by housing density alone. The Northeast pattern dominates the top 10: NJ, MA, CT, NH all show pre-1980 housing above 50% with very low roofer density.
Saturation flips the math at the other end. Florida has 5,036 roofing establishments serving 10.6M housing units - 0.47 per 1,000, the second-highest supply density in the country. Hurricane and storm work supports the Florida count, but the per-unit competition is fierce. California (0.23 per 1,000) shows the same dynamic at scale. Idaho closes out the bottom at index 0 with 0.48 contractors per 1,000 housing units against the state’s newer housing stock.
Electrical: Rust Belt dominance
Electrical work has the strongest correlation with old housing stock of any trade we tracked. Pre-1980 wiring requires more service work, code-mandated upgrades drive panel replacements, and EV charger installation has added a new growth wedge in the last 5 years.
| Rank | State | Index | Contractors per 1k housing | Establishments | Pre-1980 housing | Annual HDD |
|---|---|---|---|---|---|---|
| 1 | Michigan | 49 | 0.44 | 2,040 | 61.4% | 6,136 |
| 2 | Ohio | 45 | 0.46 | 2,472 | 62.0% | 5,250 |
| 3 | Pennsylvania | 42 | 0.51 | 3,016 | 66.3% | 4,612 |
| 4 | Illinois | 41 | 0.53 | 2,921 | 62.2% | 6,339 |
| 5 | Arizona | 40 | 0.67 | 2,224 | 27.9% | 935 |
| 6 | Missouri | 38 | 0.53 | 1,504 | 52.2% | 5,133 |
| 7 | Kansas | 37 | 0.57 | 747 | 54.8% | 4,592 |
| 8 | South Carolina | 37 | 0.50 | 1,274 | 31.9% | 2,551 |
| 9 | Nevada | 36 | 0.62 | 851 | 20.7% | 1,951 |
| 10 | Texas | 36 | 0.59 | 7,418 | 31.2% | 1,367 |
The Rust Belt sweep (Michigan, Ohio, Pennsylvania, Illinois) reflects three converging factors: 60%+ pre-1980 housing, contractor supply densities at 0.44-0.53 per 1,000 housing units (well below the national average), and meaningful heating demand that drives HVAC-related electrical work. Pennsylvania alone has 3,016 electrical contractors serving 5.86 million housing units, where 66% of the housing predates modern electrical code.
Wyoming, Idaho, and Montana close out the bottom across electrical too. The pattern repeats: low population density, newer housing stock, high per-unit contractor supply (1.23-1.34 per 1,000). These are oversupplied markets relative to their underlying housing demand.
Landscaping: the Sunbelt premium
Landscaping demand follows growing season length, which our index proxies through cooling degree days. The result is a clean Sunbelt sweep, with one cold-state outlier (the model can’t predict the value Vermonters place on their gardens).
| Rank | State | Index | Contractors per 1k housing | Establishments | Pre-1980 housing | Annual CDD |
|---|---|---|---|---|---|---|
| 1 | Arizona | 42 | 0.53 | 1,754 | 27.9% | 4,608 |
| 2 | Texas | 34 | 0.46 | 5,783 | 31.2% | 3,157 |
| 3 | Nevada | 28 | 0.59 | 803 | 20.7% | 3,568 |
| 4 | Louisiana | 26 | 0.55 | 1,174 | 45.5% | 3,004 |
| 5 | Hawaii | 24 | 1.02 | 585 | 48.9% | 4,628 |
| 6 | Florida | 19 | 1.08 | 11,493 | 32.1% | 4,575 |
| 7 | Mississippi | 19 | 0.54 | 733 | 40.1% | 2,258 |
| 8 | Arkansas | 17 | 0.61 | 870 | 38.0% | 2,206 |
| 9 | New Mexico | 17 | 0.42 | 406 | 41.6% | 1,322 |
| 10 | Oklahoma | 16 | 0.63 | 1,140 | 47.5% | 2,098 |
Arizona leads with 1,754 landscaping establishments serving 3.3 million housing units at 4,608 cooling degree days. The contractor-to-housing ratio is the third-highest in the top 10, but climate demand drives Arizona to the top regardless. Texas operates at much larger scale (5,783 establishments) but with similar contractor density, putting it second.
Florida (11,493 establishments at 1.08 per 1,000) shows the highest landscaping supply density in the country. The market is still strong on an opportunity-index basis but competitive intensity is real. Saturation hits hardest in the Pacific Northwest (Washington at 0.99 per 1,000 with limited growing-season demand) and New England (New Hampshire 1.71, Vermont 1.64).
Janitorial: Michigan in a category of its own
Janitorial services have the most evenly distributed climate demand (commercial cleaning is largely climate-neutral), so the index here is almost entirely driven by housing units relative to contractor count.
| Rank | State | Index | Contractors per 1k housing | Establishments | Pre-1980 housing |
|---|---|---|---|---|---|
| 1 | Michigan | 100 | 0.35 | 1,639 | 61.4% |
| 2 | Oklahoma | 76 | 0.39 | 701 | 47.5% |
| 3 | Pennsylvania | 74 | 0.44 | 2,604 | 66.3% |
| 4 | Mississippi | 66 | 0.40 | 544 | 40.1% |
| 5 | Alabama | 62 | 0.43 | 1,018 | 41.1% |
| 6 | Arizona | 62 | 0.43 | 1,415 | 27.9% |
| 7 | West Virginia | 62 | 0.44 | 383 | 54.6% |
| 8 | New Mexico | 61 | 0.44 | 424 | 41.6% |
| 9 | Texas | 60 | 0.44 | 5,561 | 31.2% |
| 10 | Arkansas | 59 | 0.43 | 605 | 43.0% |
Michigan registers an index of 100 on a single dynamic: 4.67 million housing units against just 1,639 janitorial establishments. That puts Michigan at 0.35 contractors per 1,000 housing units, the lowest density of any state we tracked across any trade. Pennsylvania, Ohio’s neighbor, lands at #3 with 2,604 establishments at 0.44 per 1,000.
Saturated markets: Idaho (1.03 per 1,000), Montana (1.04), Hawaii (1.07). All show very high contractor density relative to housing, often because tourism-driven commercial cleaning supports a larger workforce than housing alone would predict.
What the saturated markets share
Five states appear in the bottom 10 across multiple trades: Idaho, Wyoming, Montana, New Hampshire, and Washington. These states share a pattern that contractors entering or expanding should understand.
Newer housing stock means lower per-unit service-call frequency. Idaho’s pre-1980 housing share is below 35%; Wyoming is similar. Less old housing means less corroded plumbing, fewer outdated panels, fewer aging HVAC systems hitting replacement.
High per-capita contractor counts compound the demand shortage. Idaho has 1.34 electrical contractors per 1,000 housing units and 1.32 HVAC contractors - both 60% above the national median supply density. Wyoming sits at 1.33 electrical and 1.31 HVAC.
The pattern is not “these are bad markets.” Wyoming HVAC contractors who already operate there are doing fine. The pattern is “these are bad markets to enter or expand into from elsewhere.” New contractors in saturated markets face higher customer-acquisition costs, more aggressive pricing competition, and lower per-job margins. The Opportunity Index makes that visible before you sign a lease.
What this means for marketing decisions
Three practical implications fall out of this analysis, each with a clear action.
For multi-state contractors deciding where to expand: Look at your trade’s top 10 and screen for states where you have logistical proximity. A Pennsylvania-based plumbing operation considering expansion finds Ohio (index 23) and Michigan (index 28) right next door, both with old housing and weak winters. A Texas roofing company evaluates New Mexico, Oklahoma, and Arkansas first.
For single-state contractors evaluating market pressure: Use your state’s opportunity index as a baseline pricing signal. A roofer in New York (index 48, 0.10 contractors per 1,000) has pricing leverage that a roofer in Idaho (index 0, 0.48 per 1,000) does not. Knowing your supply density helps justify rate increases and informs whether a slow month is a market problem or a marketing problem.
For SaaS and agency partners building products for contractors: The state-by-state distribution shapes go-to-market. Pipeline’s own analytics show contractor accounts cluster heavily in Texas, Florida, Pennsylvania, and Ohio - which maps cleanly to the trade-specific opportunity rankings above. Targeting the underserved-market quadrant is a better way to win than spraying a single national ad campaign.
Coming in Part 2: where public data and visitor behavior diverge
This analysis uses public datasets joined for the first time at the state-by-trade level. It tells you where contractor supply is thin relative to housing demand. It does not tell you where contractor websites are converting visitors into booked jobs, or where 96% of website traffic is leaving without calling.
That is the gap Pipeline’s first-party visitor identification data fills. Part 2 of this analysis will overlay aggregated visitor-behavior signals from the contractor websites in our network against the public demand-supply picture. Where public data says “Michigan plumbing is underserved” we will be able to test “do Michigan plumbing websites actually capture the visitors landing on them, or do they leave at the same 96% rate as everywhere else?”
We expect divergence. Underserved markets do not automatically convert better. The contractor who wins in a high-opportunity state is the one who answers the phone, follows up on quotes, and identifies the anonymous visitors on their website who never filled the form. Public data says where to set up shop. First-party visitor data says whether your shop is working once you are there.
Part 2 publishes when the aggregated visitor dataset reaches statistical significance across enough contractor accounts to publish defensibly. Email subscribers to the Pipeline newsletter get the report first.
Methodology and source data
Every number in this article is derived from publicly available federal datasets. The raw inputs, the join script, and the final ranking files are all reproducible from the pipeline-marketing GitHub repository.
Supply data: BLS Quarterly Census of Employment and Wages 2024 annual files, NAICS codes 23822 (Plumbing, Heating, and Air-Conditioning Contractors), 23821 (Electrical Contractors and Other Wiring Installation Contractors), 23816 (Roofing Contractors), 561730 (Landscaping Services), 561720 (Janitorial Services). Filtered to agglvl_code 57/58 (state level, NAICS 5/6-digit, Private ownership). Pulled May 25, 2026.
Housing and demographic data: Census Bureau American Community Survey 2024 5-year estimates via Census Reporter API. Tables B25001 (total housing units), B25003 (tenure), B25077 (median value owner-occupied), B19013 (median household income), B25034 (year structure built). Pulled May 25, 2026.
Climate data: NOAA NCEI 1991-2020 Climate Normals via the NCEI Data Access API. One principal weather station per state, typically the largest metro’s airport ASOS (e.g., LaGuardia for NY, Phoenix Sky Harbor for AZ, Logan for MA). Variables: ANN-HTDD-NORMAL (annual heating degree days, base 65°F) and ANN-CLDD-NORMAL (annual cooling degree days, base 65°F).
Index formula:
- Demand Score = housing_units × age_factor × climate_factor[trade] × income_factor
- age_factor = 1 + 0.5 × (pct_pre_1980 / 100), capped at 1.5
- income_factor = 1 + 0.3 × (state_median / national_median - 1), bounded [0.7, 1.3]
- climate_factor varies per trade (see join-and-score.mjs for full weights)
- Supply Density = annual_avg_estabs / (housing_units / 1000)
- Opportunity Raw = Demand / Supply Density / housing_units
- Opportunity Index = min-max normalized across all 51 jurisdictions, scaled 0-100
DC is excluded from headline rankings as an analytical outlier (very low contractor count, very high income, dense urban geography). National averages used: 4,563 HDD, 1,423 CDD, $81,468 median household income.
Known limitations addressed in Part 2: state-level climate proxies metro climate (so within-state variation - e.g., Western vs Eastern Texas - is undersold), BLS QCEW excludes self-employed/1099 contractors (so true supply is higher than reported), and Census Reporter’s “latest” tag pulled the 2024 5-year release for CBSAs but the 2024 1-year release for states (slightly different sampling years).
Frequently Asked Questions
What data sources are used in the Pipeline Opportunity Index?
Three primary federal sources: BLS Quarterly Census of Employment and Wages 2024 annual data for contractor establishments across 5 NAICS codes, Census Bureau American Community Survey 2024 5-year estimates for housing units, owner-occupied units, median home value, median household income, and year built distribution, and NOAA NCEI 1991-2020 Climate Normals for heating and cooling degree days at one principal weather station per state.
How is the Opportunity Index calculated?
For each state and trade combination we compute Demand Score (housing units multiplied by age factor, climate factor, and income factor) divided by Supply Density (contractor establishments per 1,000 housing units). The result is normalized to 0-100 across all 51 jurisdictions. Higher index means more demand per contractor.
Why is California ranked low for HVAC opportunity?
California has 12,467 plumbing and HVAC establishments serving relatively newer housing stock with mild coastal climate. Its supply density is 0.84 contractors per 1,000 housing units against modest heating and cooling demand at LAX (1,420 HDD plus 552 CDD). High supply and low climate demand combine for an index of 0.
Which trade should a new contractor enter based on this data?
Trade choice depends more on personal expertise and local conditions than national rankings. The data identifies where existing contractors face less competition per housing unit. Roofing in the Northeast (NY, NJ, MA) shows the lowest supply density at 0.10-0.15 establishments per 1,000 housing units, while janitorial in Michigan tops that trade at index 100.
When will this analysis include metro-level granularity?
State-level analysis is v1. Metro-level (CBSA) analysis is planned for the Part 2 release, which will overlay Pipeline first-party visitor identification data from the contractor websites in our network. That sequel will surface where public BLS demand-supply signals diverge from actual website visitor behavior.
What to do today
If you operate in a top-10 state for your trade, your current pricing is probably under-leveraging market position. If you operate in a bottom-10 state, your acquisition strategy needs to be tighter than the national average to compete on cost per booked job. Either way, knowing where your visitor traffic comes from and what they do once they hit your site is the next data layer. See who is visiting your home service website to start measuring it.
Written by
Pipeline Research Team