In the first quarter of 2024, homeowners invested $463 billion in home renovations. Projections suggest that home renovation spending will decrease by $12 billion in the first quarter of 2025.
According to USA Today, despite home renovation statistics and spending trends signaling a pending decline post-pandemic, many homeowners plan to invest in their home. The home renovation industry has quickly surpassed the $400 billion threshold within the last two years, according to reports from the Joint Center for Housing Studies of Harvard University (JCHS) Leading Indicator of Remodeling Activity (LIRA).
“There is also a social component, where homeowners may be influenced by their neighbors or friends who are renovating their properties,” said Ermanno Affuso, professor of economics and finance at the University of South Alabama in Mobile. “Factors such as income, interest rates, and intangible factors like sentimental value and rational expectations all play a role in driving the growth in home renovations.”
Kitchens and bathrooms remain top of mind for most home renovators. However, the 2022 National Association of Realtors Remodeling Impact Report reveals that less popular remodeling projects such as refinishing hardwood floors and new wood flooring offer a larger return on investment.