Factors Affecting the Home Care Industry in 2025

The home care industry is constantly evolving to meet the needs of the aging population and respond to changes that impact the healthcare landscape as a whole. In the United States, the market is projected to grow to $253.4 billion by 2030, according to Grand View Research. In 2025, key factors affecting the home care industry include, but are not limited to, market growth, technological advancements, and various barriers to accessing care. In this blog, we’ll explore each of these factors—and what they mean for both home care agencies and the individuals and families they serve.

Factors Affecting the Home Care Industry in 2025

Market Growth

One of the most influential factors in 2025 is the expected growth the market will experience as we continue through 2025 and into 2026. The home care industry is expected to grow $107 billion in 2025 alone, according to NCH stats. With the Baby Boomer generation reaching age 65 and older, the number of people needing help at home will increase rapidly. This creates significant opportunity for home care agencies to fill in the gap of increased demand.

Along with an aging population comes the demand for diversifying service offerings. Traditional in-home caregiving may no longer be sufficient. To remain competitive, agencies will need to diversify services to accommodate the caregiver shortage—which we will discuss later. Value-based, unique services will become increasingly important for agencies to differentiate from the saturated market. These types of services could include: care-managed home care, remote patient monitoring (RPM), AI and robotics, live-in care, and more.

Technological Advancements

Like mentioned above, technological advancements will greatly affect home care agencies and their potential growth. With the addition of remote patient monitoring (RPM), AI & robotics, and telehealth, agencies will encounter opportunities to increase access to care for rural clients or those resistant to having a caregiver in the home.

There is, however, a possibility that towards the beginning of these types of services agencies could encounter increased costs and difficulty with efficiently utilizing these services. Additionally, this could impose increased costs onto the seniors purchasing these services. As these types of services continue to grow, agencies will have to monitor and modify operations in order to meet the changing expectations.

Barriers to Accessing Care

Caregiver Shortage

As the aging population grows, the caregiver workforce is struggling to keep up. High turnover rates—often exceeding 60% annually—combined with low wages, emotionally demanding work, and limited career growth make recruitment and retention a persistent challenge in the home care industry.

In 2025, agencies must focus not just on hiring, but on building a supportive, purpose-driven workplace culture. Caregivers are more likely to stay with employers who value their work, offer flexibility, and foster a sense of belonging. Competitive wages and benefits matter—but culture, communication, and growth opportunities are just as critical.

Moreover, the caregiver shortage will make it more difficult to meet client demand without innovative solutions. Agencies that invest in technology, team-based care models, and enhanced caregiver support systems will be better equipped to provide consistent, high-quality care.

Cost of Care

The rising cost of care is another major barrier for families. As demand outpaces supply, prices for both in-home care and facility-based care continue to climb. This makes accessing professional support increasingly difficult for many older adults and their loved ones.

At the same time, unpaid family caregivers are under growing pressure. A 2020 AARP report revealed that 53 million Americans are providing unpaid care—often without access to respite. This number is expected to grow, increasing the need for affordable respite care and caregiver support services.

Without significant policy changes or innovations in care delivery, high costs will continue to place strain on both professional agencies and families alike.

CMS Changes

The Centers for Medicare & Medicaid Services (CMS) play a major role in shaping care delivery in the U.S.—and 2025 is no exception. Recent and upcoming CMS changes are pushing the healthcare system toward value-based care, encouraging providers to improve outcomes while reducing costs.

For home care agencies, this shift means greater emphasis on measurable results, client satisfaction, and coordination across providers. Agencies that offer care-managed services, integrate technology for tracking outcomes, or partner with healthcare systems will be better positioned to thrive under these models.

Additionally, CMS has expanded reimbursement opportunities for certain home-based services, such as remote patient monitoring and chronic care management. Staying up to date on these changes and advocating for favorable reimbursement policies will be key for agency growth and sustainability.

Conclusion

The home care industry in 2025 stands at a critical crossroads. With a rapidly aging population, evolving client needs, and mounting pressure on caregivers, agencies must be nimble, strategic, and compassionate to thrive.

To stay competitive and provide meaningful care, home care providers must embrace innovation in technology and in the ways they support staff and families. By focusing on workforce development, service diversification, and value-driven care models, agencies can position themselves to meet rising demand and deliver high-quality care for years to come.

Ultimately, the future of home care will be shaped not just by policy and technology, but by how well we support the people at the heart of the industry: caregivers, clients, and their families.