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Home Remodeling Activity Expected to Continue Softening Through 2023

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Home Remodeling Activity Expected to Continue Softening Through 2023

Harvard's Joint Center for Housing Studies' Leading Indicator of Remodeling Activity shows annual spending on home improvements and repairs is expected to decrease through 2023 and into 2024

July 20, 2023
Worker swings sledge hammer to demolish bathroom for home remodel
Image: Philip / stock.adobe.com

According to the latest data from the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, annual expenditures for improvements and repairs to owner-occupied homes is expected to decrease at an accelerating rate through the first half of 2024. The Joint Center's Leading Indicator of Remodeling Activity (LIRA) projects year-over-year spending on homeowner improvements and maintenance will shrink by 2.7% through Q1 2024 and by 5.9% through Q2, following a slowdown in growth that started during the fourth quarter of 2022.

“Home remodeling activity continues to face strong headwinds from high interest rates, softening house price appreciation, and sluggish home sales,” says Abbe Will, Associate Project Director of the Remodeling Futures Program. “Annual spending on homeowner improvements and repairs is expected to decrease from $486 billion through the second quarter of this year to $457 billion over the coming four quarters.”

“The ongoing reductions in household moves will cause a decline in the remodeling and repair activity that typically occurs around the time of a home sale,” says Carlos Martín, Project Director of the Remodeling Futures Program at the Center. “The magnitude of the impact may be offset if owners who are locked into their current homes with ultra-low mortgage rates continue to renovate to meet changing needs or take advantage of new federal incentives for energy-efficiency retrofits.”  

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