While surging inflation and elevated fears of a recession are leading to a slowdown in home sales, housing experts say the remodeling industry is on track to see strong growth in the year ahead. Homeowners are projected to spend $448 billion nationally in the first quarter of 2023, according to the Harvard Joint Center for Housing Studies, a 34.1% increase from Q1 2020.
Rather than selling and entering into the opposite end of the for-sale market as buyers, homeowners are opting to stay in place and update their homes, but experts predict that many will scale back the extent or the cost of their remodels in 2023 as higher interest rates make loans more expensive, Realtor.com reports.
“We are expecting the market to continue to grow, just not nearly as fast as it was the past couple of years,” says Abbe Will, a senior research associate at the Harvard Joint Center for Housing Studies. “Even if we are in a recession in 2023, I wouldn’t necessarily expect the renovation market to decline.”