Annual spending on home improvements and repairs is expected to remain relatively flat through late 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. Year-over-year growth in renovation and repair spending is expected to reach just 1.5% by the third quarter.
“Retail spending on building products has been flat to negative, and remodeling permits have stagnated, which points to continued sluggish renovation activity,” said Rachel Bogardus Drew, Director of the Remodeling Futures Program at the Center. “We expect annual spending to hover around $525 billion through the third quarter of next year.”
Chris Herbert, Managing Director of the Center, also noted that, “Housing starts also continue to decline, and we are seeing persistent weakness in the broader housing market. These ongoing headwinds could slow growth in remodeling spending even further in the quarters ahead.”
The LIRA provides a short-term outlook of national home improvement and repair spending to owner-occupied homes. Calculated from the annual rate-of-change of its components, the indicator 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 (JCHS) strives to improve equitable access to decent, affordable homes in thriving communities, conducting rigorous research to advance policy and practice and bringing together diverse stakeholders to spark new ideas for addressing housing challenges. Through teaching and fellowships, JCHS also mentors and seeks to inspire the next generation of housing leaders.
