The latest Leading Indicator of Remodeling Activity (LIRA) from Harvard’s Joint Center for Housing (JCHS) studies predicts that annual expenditures on improvements and maintenance for owner-occupied homes will gradually decrease through 2026. According to the LIRA, home renovation and repair spending will grow by 2.9% year-over-year (YoY) in the early part of this year, with that growth slowing to 1.6% by year’s end.
“Single-family home sales and permitting activity have picked up modestly from very low levels, which should support a nominal increase in remodeling activity this year,” says Rachel Bogardus Drew, Director of the Remodeling Futures Program at the Center. “Even with some deceleration later in the year, overall annual homeowner spending on improvements is expected to reach $522 billion by the end of 2026.”
Sales and permitting of single-family homes have seen a slight increase from their low levels, which is expected to contribute to a nominal rise in remodeling activity this year. Despite some slowdown later in the year, it is anticipated that the total annual expenditure by homeowners on improvements will hit $522 billion by the conclusion of 2026.
The trends in remodeling are closely aligned with the health of the overall housing market. If interest rates start to relax, it could give a much-needed lift to housing construction and retail sales of building materials, which currently present substantial obstacles to homeowner improvement spending.
“Remodeling trends closely track the health of the broader housing market,” says Chris Herbert, Managing Director of the Center. “If interest rates begin to ease, that could provide a much-needed boost to both housing construction and retail sales of building materials, which for now continue to pose significant headwinds to homeowner improvement spending.”
Note: 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, 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.
The next LIRA release date has been postponed to April 16, 2026.
