Though fewer homeowners have been taking on remodeling projects, don’t mistake it as a slowdown, according to a the Leading Indicator of Remodeling Activity (LIRA) report by Harvard University’s Joint Center for Housing Studies
This activity indicator is an outlook measuring home improvement and repair spending on owner-occupied homes. Peaking at 17.3% in the third quarter of 2022, LIRA has been declining since, and slid 1.2% in the first quarter of 2024 compared to the prior quarter.
Additionally, the National Association of Home Builders’ (NAHB) NAHB/Westlake Royal Remodeling Market Index reflected a similar decline, reporting a peak at 87 points in the third quarter of 2021 and has been consistently declining ever since. The measure fell to 66 points in the first quarter of 2024, down one point from the previous quarter.
However, remodelers are still seeing the conditions as “good” compared to “poor,” according to NAHB Chief Economist Robert Dietz.
NAHB Remodelers Chair Mike Pressgrove noted in the group’s first quarter report that, “demand for remodeling remains solid, especially among customers who don’t need to finance their
projects at current interest rates.”
According to CNBC, The height of the Covid-19 pandemic brought with it a burst of home renovation activity.
Homeowners were eager to invest in the spaces they were spending so much time in: updating key spaces like kitchens and bathrooms, building out home offices and adding pools.
Some also had savings built up thanks to stimulus checks, and from activities they couldn’t do during early lockdowns — and rerouted that money toward home improvements and remodels, said Abbe H. Will, senior research associate and associate director of Remodeling Futures at the Joint Center for Housing Studies at Harvard University. In 2021, owners used cash from savings to pay for nearly four out of five projects, according to a JCHS report.
“We’re coming off such high levels of spending,” Will said.
