Homeowner spending on improvements and repairs is projected to stabilize and gradually increase through mid-2025, with a slight annual decline of -0.5% expected by the second quarter, according to Harvard’s Joint Center for Housing Studies. Despite economic uncertainty and slower home sales, the home remodeling slowdown is predicted to remain mild, with annual expenditures reaching $466 billion, similar to the previous year’s levels.
According to Harvard University, a modest downturn, homeowner expenditures for improvements and repairs are expected to trend up through the first half of 2025, 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 declines in annual spending for renovations and maintenance to owner-occupied homes will ease to just -0.5 percent through the second quarter of 2025.
“Economic uncertainty and continued weakness in home sales and the sale of building materials are keeping a lid on residential remodeling, although many drivers of spending are starting to firm up again,” says Carlos Martín, Director of the Remodeling Futures Program at the Center. “After several years of frenzied activity during the pandemic, owners are now making upgrades and repairs to their homes at a steadier and more sustainable pace.”
“Annual spending on homeowner improvements and maintenance is expected to reach $466 billion through the second quarter of next year, on par with spending over the past four quarters,” says Abbe Will, Associate Director of the Remodeling Futures Program. “The home remodeling slowdown should continue to be relatively mild, with activity stabilizing just shy of last year’s peaks.”
The Leading Indicator of Remodeling Activity (LIRA) provides a short-term outlook of national home improvement and repair spending to owner-occupied homes. The indicator, measured as an annual rate-of-change of its components, is designed to project the annual rate of change in spending for the current quarter and subsequent four quarters, and is intended to help identify future turning points in the business cycle of the home improvement and repair industry. Originally developed in 2007, the LIRA was re-benchmarked in April 2016 to a broader market measure based on the biennial American Housing Survey.
The LIRA is released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University in the third week after each quarter’s closing. The next LIRA release date is October 17, 2024.
The Remodeling Futures Program, initiated by the Joint Center for Housing Studies in 1995, is a comprehensive study of the factors influencing the growth and changing characteristics of housing renovation and repair activity in the United States. The Program seeks to produce a better understanding of the home improvement industry and its relationship to the broader residential construction industry.
The Harvard Joint Center for Housing Studies strives to improve equitable access to decent, affordable homes in thriving communities. We conduct rigorous research to advance policy and practice, and we bring together diverse stakeholders to spark new ideas for addressing housing challenges. Through teaching and fellowships, we mentor and inspire the next generation of housing leaders.
