Home Warranty Service Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented, By Coverage Type (Basic Coverage, Enhanced Coverage, Customized Coverage), By Property Type (Single-Family Homes, Multi-Family Homes, Commercial Properties), By Service Provider (National Companies, Regional Companies, Local Contractors), By Region, By Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 4.17 Billion
CAGR (2026-2031)	11.77%
Fastest Growing Segment	Enhanced Coverage
Largest Market	North America
Market Size (2031)	USD 8.13 Billion

Market Overview

The Global Home Warranty Service Market will grow from USD 4.17 Billion in 2025 to USD 8.13 Billion by 2031 at a 11.77% CAGR. The Global Home Warranty Service Market comprises service contracts that cover the repair or replacement of major home systems and appliances resulting from normal wear. Market growth is primarily bolstered by the financial protection these plans offer against rising repair costs and the maintenance requirements of an aging housing inventory. A key driver involves the increasing average lifespan of residential properties, which necessitates more frequent systemic upkeep. According to the National Association of Home Builders, in 2024, the median age of owner-occupied homes in the United States was 40 years, underscoring the critical demand for coverage in older properties.

However, market expansion is frequently impeded by fluctuations in real estate transaction volumes, which serve as a primary distribution channel for these services. Economic headwinds and inventory shortages have suppressed home sales, thereby limiting opportunities for new contract acquisitions. This constraint is evident in buyer demographics; according to the National Association of Realtors, in 2024, the share of first-time home buyers decreased to a historic low of 24 percent, restricting the inflow of new customers through traditional property transfer avenues.

Key Market Drivers

Escalating repair and replacement costs for home systems constitute a primary catalyst for the expansion of the Global Home Warranty Service Market. As inflationary pressures and supply chain disruptions inflate the prices of labor and materials, homeowners are increasingly turning to warranty contracts to mitigate the risk of exorbitant out-of-pocket expenses. This financial strain is exacerbated by the rising expense of routine upkeep, which compels consumers to seek fixed-cost service solutions that stabilize their annual household budgets. According to Thumbtack, October 2024, in the 'Home Care Price Index', the average annual cost to maintain a single-family home in the United States rose to $10,433 in the third quarter of 2024, representing a 5.9% increase compared to the same period in the previous year.

Increasing consumer demand for financial protection against breakdowns further accelerates market adoption, driven by the unpredictability and frequency of system failures. Modern homeowners, facing economic uncertainty, prioritize coverage that safeguards their liquidity against sudden mechanical malfunctions in essential appliances and infrastructure. This heightened sensitivity to risk is reflected in the surge of service events that catch residents off guard, thereby reinforcing the value proposition of comprehensive warranty plans. According to Hippo, January 2025, in the '2024 Housepower Report', 83% of surveyed U.S. homeowners reported encountering unexpected home repairs in 2024, a figure that nearly doubled from 46% in the preceding year. This growing reliance on service contracts to manage such volatility is evident in the performance of major industry players; according to Frontdoor, Inc., in 2024, the company reported a full-year revenue of $1.78 billion for 2023, marking a 7% increase driven largely by higher pricing power and customer retention.

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Key Market Challenges

The growth of the Global Home Warranty Service Market is significantly hindered by fluctuations in real estate transaction volumes. A substantial portion of home warranty contracts are initiated during the closing process of residential property sales, making the market highly dependent on the health of the housing sector. When economic pressures or inventory shortages suppress home sales, the primary distribution channel for warranty services contracts. This reduction in property transfers directly restricts the inflow of new policyholders. Without the trigger event of a home sale, warranty providers struggle to acquire customers, as homeowners are less likely to purchase coverage independently of a transaction.

The correlation between low sales volume and market stagnation is evident in recent industry figures. According to the National Association of Realtors, in 2024, existing home sales faded to a seasonally adjusted annual rate of 3.84 million in September, reflecting prolonged market stagnation. This decline in turnover reduces the addressable market for service agreements, creating a challenging environment for revenue generation and limiting the overall expansion of the sector.

Key Market Trends

The integration of AI-driven claims processing and automation is reshaping the operational landscape of the Global Home Warranty Service Market. Providers are deploying machine learning algorithms to automate technician dispatching, reducing administrative overhead and improving resolution times. By utilizing digital platforms to match service requests with suitable contractors, companies optimize their logistical networks and enhance customer experiences. This shift towards automated efficiency is evident in the performance of market leaders; according to Frontdoor, Inc., February 2025, in the '2024 Annual Report', the company's proprietary platform enabled its preferred contractor network to complete 85 percent of all home warranty service requests in 2024, demonstrating the widespread reliance on digital workflows to manage claim volumes.

Simultaneously, the market is pivoting towards IoT-enabled predictive maintenance, transitioning the service model from reactive repairs to proactive risk mitigation. Smart sensors allow warranty providers to monitor system performance in real-time, detecting anomalies like water leaks or HVAC fluctuations before catastrophic failures occur. This connectivity lowers claim severity while aligning with the surging adoption of connected property devices. The scale of this technological influence is highlighted by the broader protection sector; according to Chubb, September 2024, in the 'Smart Solutions: IoT's Impact on Risk Mitigation in Property Insurance' article, the number of IoT connections in North America is forecast to grow to 5.4 billion by 2025, indicating a massive opportunity for data-driven preventive strategies.

Segmental Insights

Within the Global Home Warranty Service Market, the Enhanced Coverage segment is identified as the fastest-growing category. This rapid expansion is primarily driven by the increasing complexity of modern residential infrastructure, which necessitates protection beyond standard appliances. Homeowners are actively upgrading to these comprehensive plans to mitigate the substantial repair costs associated with advanced home systems, such as smart technologies, and aging structural components. Furthermore, the rising demand for inclusive contracts that cover add-ons like pools and spas reflects a broader consumer shift toward holistic financial security and risk management in property maintenance.

Regional Insights

North America holds the leading position in the global home warranty service market, primarily driven by high consumer demand for coverage against unexpected repair costs. This dominance is reinforced by the mature real estate sector in the United States, where warranty contracts are routinely included in property transactions to safeguard buyers. Additionally, the region benefits from a well-regulated environment supported by entities like the Service Contract Industry Council, which promotes fair standards and consumer trust. The prevalence of aging housing infrastructure further necessitates these services, ensuring consistent market expansion across the region.

Recent Developments

• In March 2025, American Home Shield launched an innovative video chat feature within its mobile application, designed to connect members directly with technical experts for real-time support. This new capability allowed homeowners to consult with experienced professionals regarding maintenance and repair issues for their home systems and appliances without immediately scheduling an in-home visit. The service was introduced to enhance the customer experience by offering convenient, on-demand diagnostics that could potentially resolve problems remotely. By leveraging this technology, the company aimed to streamline the service process and reduce the wait times typically associated with dispatching contractors for minor or easily addressable issues.
• In December 2024, Frontdoor, Inc. completed the acquisition of 2-10 Home Buyers Warranty, a prominent provider of new home structural warranties, in an all-cash transaction valued at $585 million. This strategic consolidation allowed the company to diversify its service portfolio by integrating structural warranty products for new construction with its existing home service plans. The deal was structured to expand the company's customer base and generate cross-selling opportunities across its residential service channels. To support the transaction, the organization secured a significant credit facility, utilizing the proceeds to fund the purchase and advance its broader growth objectives within the home warranty sector.
• In August 2024, Liberty Home Guard formed an exclusive partnership with the National Fraternal Order of Police, the largest organization of sworn law enforcement officers in the United States. Through this collaboration, the company was designated as the official home warranty provider for the organization's extensive membership base. The agreement was designed to offer tailored home protection plans and exclusive benefits to active and retired officers, thereby ensuring affordable coverage for their home systems and appliances. This initiative underscored the company’s strategy to expand its market reach by aligning with major professional associations and providing specialized value to public service communities.
• In June 2024, Cinch Home Services announced a strategic partnership with FirstChoice, a network for independent insurance agents and a MarshBerry company. This collaboration was established to enable the network’s agents to offer comprehensive home protection plans to their clients alongside standard homeowners insurance policies. By combining these offerings, the partnership aimed to close coverage gaps for unexpected breakdowns of critical home systems and appliances that are often excluded from traditional insurance. The initiative focused on empowering insurance professionals with robust risk management tools while providing homeowners with a seamless solution for total home protection and repair services.

Key Market Players

• America’s First Choice Home Club
• Home Buyers Warranty Corporation
• First American Home Warranty Corporation
• Frontdoor, Inc.
• Cinch Home Services, Inc.
• FirstService Corporation
• Old Republic International Corporation
• Liberty Home Guard
• Select Home Warranty
• ServicePlus Home Warranty

By Coverage Type	By Property Type	By Service Provider	By Region
Basic Coverage Enhanced Coverage Customized Coverage	Single-Family Homes Multi-Family Homes Commercial Properties	National Companies Regional Companies Local Contractors	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Home Warranty Service Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Home Warranty Service Market , By Coverage Type:

• Basic Coverage
• Enhanced Coverage
• Customized Coverage

• Home Warranty Service Market , By Property Type:

• Single-Family Homes
• Multi-Family Homes
• Commercial Properties

• Home Warranty Service Market , By Service Provider:

• National Companies
• Regional Companies
• Local Contractors

• Home Warranty Service Market , By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE