Annual spending on improvements and maintenance to owner-occupied homes is projected to slow sharply in early 2027, according to the latest Leading Indicator of Remodeling Activity (LIRA) from the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The new LIRA shows year-over-year growth in home renovation and repair spending of 0.5% by the first quarter of 2027—a pace that remains positive in nominal terms but is less than overall inflation.
“Growth in remodeling permits and retail spending on building products has been flat recently, signaling stagnant interest in home improvement,” said Rachel Bogardus Drew, Director of the Remodeling Futures Program at the center. “Even so, homeowners are expected to maintain spending at roughly last year’s levels, with total improvement and repair expenditures edging up modestly to $523 billion in early 2027.”
Chris Herbert, Managing Director of the center, noted that, “Remodeling follows the overall housing market. Without a sustained rebound in construction, we’re likely to see remodeling spending remain in this low-growth range for the near future.”
The LIRA provides a short-term outlook of national home improvement and repair spending to owner-occupied homes. The indicator, calculated from the annual rate-of-change of its components, is designed to project the annualized 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 (AHS), and was last revised in late 2024 with updated correlations following the release of the 2023 AHS.
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.
About the Harvard Joint Center for Housing Studies
The Harvard Joint Center for Housing Studies strives to improve equitable access to decent, affordable homes in thriving communities. It conducts rigorous research to advance policy and practice and brings together diverse stakeholders to spark new ideas for addressing housing challenges. Through teaching and fellowships, the center mentors and inspires the next generation of housing leaders.
