Leading Indicator of Remodeling Activity Points to Slower Growth Through 2026

On Monday, the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University released its latest Leading Indicator of Remodeling Activity (LIRA), projecting that annual spending on improvements and maintenance to owner-occupied homes will gradually ease through 2026.

The LIRA projects that year-over-year growth in home renovation and repair spending will be 2.9% early this year before slowing to 1.6% growth by the end of the year.

Rachel Bogardus Drew, director of the Remodeling Futures Program at the Joint Center for Housing Studies, said:

“Single-family home sales and permitting activity have picked up modestly from very low levels, which should support a nominal increase in remodeling activity this year. Even with some deceleration later in the year, overall annual homeowner spending on improvements is expected to reach $522 billion by the end of 2026.”

Christopher Herbert, research director at the Joint Center for Housing Studies, added:

“Remodeling trends closely track the health of the broader housing market. If interest rates begin to ease, that could provide a much-needed boost to both housing construction and retail sales of building materials, which for now continue to pose significant headwinds to homeowner improvement spending.”