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 percent 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.”
“Housing starts also continue to decline, and we are seeing persistent weakness in the broader housing market,” said Chris Herbert, managing director of the Center. “These ongoing headwinds could slow growth in remodeling spending even further in the quarters ahead.”
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. 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.