Reversing a pullback seen late last year, spending for improvements and repairs on owner-occupied homes is expected to expand by the middle of 2025. This is according to the Harvard University Joint Center for Housing Studies’ latest Leading Indicator of Remodeling Activity (LIRA). Annual expenditures for home renovation and maintenance are projected to grow by 1.2% through third quarter of 2025.
Signaling good news for residential improvement and repairs next year, new home construction rates and sales of existing homes are both growing. Additionally, stronger gains in home values (and home equity levels) are to boost both discretionary and “need-to-do” replacement projects for owners staying in place.
According to MortgagePoint, Projections put annual spending for home improvements and maintenance on a growth track, adding $5 billion dollars in the next year, from $472 billion today to $477 billion through Q3 2025. This should put residential remodeling and repair expenditures back on track to approach past peak levels from here on out.
According to a recent poll conducted by TD Bank, two-thirds (66%) of homeowners still consider their homes to be a source of wealth for future generations, indicating that homeowners continue to perceive their houses as strong financial assets in the present market climate. According to three out of five respondents (60%) who bought their most recent house, they decided not to sell anytime soon because of the low interest rates they were able to get on their mortgage. Rather, the increasing equity in their property is helping them accumulate wealth.
