Remodeling Expected to See Slow but Steady Growth Into Next Year

Annual expenditures for improvements and maintenance to owner-occupied homes are projected to remain steady through the end of this year and into the middle of 2026, according to the newest Leading Indicator of Remodeling Activity report from the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.

The LIRA projects that year-over-year spending on home renovation and repair will rise by 2.4% in early 2026 before easing to 1.9% during the third quarter of next year.

“Upward trends in both remodeling permit activity and single-family home sales suggest that demand for home improvement will remain stable in the coming year,” says Rachel Bogardus Drew, director of the Remodeling Futures Program at the Center. “Despite the modest pace, total homeowner remodeling spending is expected to reach $524 billion in early 2026, a new record high.”

“If the housing market begins to show signs of momentum, remodeling could be poised for stronger growth into 2027,” says Chris Herbert, managing director of the Center. “However, sluggish housing starts and uncertainty in the broader economy, which are factors in predicting remodeling expenditures, are creating headwinds to larger gains in renovation and repair spending.”

The LIRA provides a short-term outlook of national home improvement and repair spending to owner-occupied homes. The indicator, measured as an annual rate-of-change of its components, is designed to project the annual rate of change in spending for the current quarter and subsequent four quarters, and is intended to help identify future turning points in the business cycle of the home improvement and repair industry.