Leading Indicator of Remodeling Activity Points to Slowing Growth Into Early 2027

On Tuesday, the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University released its latest Leading Indicator of Remodeling Activity (LIRA) report.

Annual expenditures for improvements and maintenance to owner-occupied homes are projected to slow sharply into early 2027. The LIRA projects that year-over-year spending for home renovation and repair will fall to 0.5% in 2027Q1—a pace that remains positive in nominal terms but is less than overall inflation.

The indicator provides a short-term outlook of national home improvement and repair spending for owner-occupied homes. It measures the annual rate of change in spending for the current quarter and the subsequent four quarters and is designed to help identify turning points in the home improvement and repair business cycle.

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

“Growth in remodeling permits and retail spending on building products has been flat recently, signaling stagnant interest in home improvement. Even so, homeowners are expected to maintain spending at roughly last year’s levels, with total improvement and repair expenditures edging up modestly to $523 billion in early 2027.”

Chris Herbert, Managing Director of the Joint Center for Housing Studies, added:

“Remodeling follows the overall housing market. Without a sustained rebound in construction, we’re likely to see remodeling spending remain in this low-growth range for the near future.”