US Homeowner Renovation and Maintenance Expenditures Expected to Weaken Through Q3

The Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University has released (1-18-24) its quarterly Leading Indicator of Remodeling Activity (LIRA). The LIRA provides a short-term outlook of national home improvement and repair spending to owner-occupied homes.

The LIRA projects that declines in annual homeowner renovation and maintenance expenditures will worsen through Q3 (-7.8%) before moderating slightly to -6.5% by in Q4. Changes in the LIRA are represented at a four-quarter moving rate.

In a press release accompanying the LIRA, Project Director Carlos Martín said:

“Home remodeling will continue to suffer this year from a perfect storm of high prices, elevated interest rates, and weak home sales. These headwinds create considerable uncertainty in the economy, and remodeling spending is projected to fall from $481 billion last year to $450 billion in 2024.”

Associate Project Director Abbe Will added:

“Even with the anticipated downturn, spending for improvements and repairs to owner-occupied homes this year is expected to easily surpass the robust levels seen early in the pandemic. Recent improvements in homebuilding and mortgage rates also support the prospect of turning a corner on the rate of remodeling spending losses by the end of the year.”