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.
Advertisement
Related Stories
Remodeling
Bathroom Remodeling Trends
Homeowners are upping their remodeling budgets to make their bathrooms larger, accessible, and more luxurious
Remodeling
A Remodeling Boom Is in Full Swing
Homeowners who can't afford to refinance and purchase a new home in today's high-cost housing market are opting to use their equity savings to renovate instead
Planning + Development
Rental Supply Shortage Leads to Sharp Uptick in Adaptive Reuse Projects
In an effort to boost rental supply and alleviate affordability concerns in the housing market, developers are transforming commercial spaces into multifamily apartment buildings