Remodeling Sector Eyes Slower Growth Ahead in 2023
A widening affordability crisis is causing a slowdown in home sales and forcing builders to pump the brakes on new housing construction, and it may also have an adverse effect on the remodeling sector in the year ahead. Though it’s already beginning to soften, spending for home improvements and repairs is expected to remain well above the market’s historical average of 5%, and annual remodeling expenditures are still set to expand to nearly $450 billion in the first half of 2023, Harvard’s Joint Center for Housing Studies reports.
The LIRA projects year-over-year gains in remodeling expenditures to owner-occupied homes will decelerate from 17.4 percent in 2022 to 10.1 percent by the second quarter of 2023.
Slowing sales of existing homes, rising mortgage interest rates, and moderating house price appreciation are expected to dampen owners’ investments in home improvements and maintenance over the coming year. Steep slowdowns in homebuilding, retail sales of building materials, and renovation permits all also point to a cooling environment for residential remodeling.