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After a mild pullback over the previous year, spending for improvements and repairs on owner-occupied homes is set to expand once again by the middle of next year, according to the Leading Indicator of Remodeling Activity (LIRA) released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
The LIRA projects that annual expenditures for home renovation and maintenance will grow by 1.2% through the third quarter of 2025.
“A continued thaw in new home construction and sales of existing homes bodes well for an uptick in residential improvement and repairs next year,” says Carlos Martín, director of the Remodeling Futures Program at the Center. “Additionally, stronger gains in home values and thus home equity levels should boost both discretionary and ‘need-to-do’ replacement projects for owners staying in place.”
“Annual spending for home improvements and maintenance is projected to grow from $472 billion today to $477 billion through the third quarter of 2025,” says Abbe Will, associate director of the Remodeling Futures Program. “A quick return to growth after a fairly modest downturn ultimately means that residential remodeling and repair expenditures are expected to approach past peak levels moving forward.”
Column and line chart providing quarterly historical estimates and projections of homeowner improvement and repair spending from 2021-Q4 to 2025-Q3 as four-quarter moving sums and rates of change. Year-over-year spending growth accelerated from 12.0% in 2021-Q4 to a peak of 17.2% in 2022-Q3 before softening steadily down to 2.1% by 2023-Q4. Year-over-year spending declines in 2024 are estimated to have reached a bottom at a rate of -3.2% in 2024-Q3. Annual spending levels are expected to increase by 1.2% from $472 billion in 2024-Q3 to $477 billion in 2025-Q3.
