Home remodeling is expected to pick up speed and remain elevated for the next 12 months, according to the Joint Center for Housing Studies of Harvard University’s Leading Indicator of Remodeling Activity. As strong home sales, ramped up new construction, and home value appreciation continue, home remodeling will only grow at a faster pace, says the center. The annual remodeling expenditures to owner-occupied homes is expected to exceed $380 billion by the middle of next year.
A year after the unprecedented changes to the US economy brought on by the pandemic, many economic indicators are showing extreme percent changes from pandemic-induced lows. To reduce the immense growth rate volatility generated by these year-over-year comparisons, the projection for 2022-Q2 utilizes smoothed data for two leading model inputs: residential remodeling permits and single-family housing starts. Using unsmoothed inputs in the LIRA model would have projected an unlikely annual growth rate roughly twice as large as reported. The Remodeling Futures Program will continue to monitor input volatility.