Annual expenditures for improvements and maintenance to owner-occupied homes are expected to grow modestly through 2026, according to the Leading Indicator of Remodeling Activity (LIRA) recently released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects that year-over-year spending for home renovation and repair will increase by 2.5 percent to reach a record $526 billion by the first quarter of 2026.
“A slight downturn after the pandemic’s record expenditures gave way to modest gains in the sector this year,” says Carlos Martín, director of the remodeling futures program at the center. “Recent increases in the sales of existing homes are expected to drive slow but steady growth in home remodeling and repair.”
“So far, high home values and other strong economic indicators have supported an uptick in homeowner improvement spending,” says Chris Herbert, managing director of the center. “However, economic volatility due to the uncertainty surrounding foreign tariffs and falling consumer confidence could well dampen this expected growth.”
Column and line chart providing quarterly historical estimates and projections of homeowner improvement and repair spending from 2022-Q2 to 2026-Q1 as four-quarter moving sums and rates of change. Year-over-year spending growth accelerated from 19.6 percent in 2022-Q2 to a peak of 26.6 percent in 2022-Q4 before softening rapidly down to 4.4 percent by 2023-Q3. Year-over-year spending declines in 2023-Q4 through 2024-Q4 are estimated to have reached a bottom at a rate of -2.3 percent in 2024-Q3. Annual rates of change turned positive again beginning in 2025-Q1 at 0.5 percent and are expected to accelerate to 2.5 percent through 2026-Q1. Annual spending levels are expected to increase from $513 billion in 2025-Q1 to $526 billion in 2026-Q1.
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.