Remodeling Expected to Grow

A turn to growth expected for residential remodeling

By Dakota Smith

October 17, 2024 | 10:09 am CDT

CAMBRIDGE, Ma. — After a mild pullback over the previous year, spending for improvements and repairs on owner-occupied homes is set to expand once again by the middle of next year, according to the Leading Indicator of Remodeling Activity (LIRA) released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects that annual expenditures for home renovation and maintenance will grow by 1.2 percent through the third quarter of 2025.

“A continued thaw in new home construction and sales of existing homes bodes well for an uptick in residential improvement and repairs next year,” says Carlos Martín, Director of the Remodeling Futures Program at the Center. “Additionally, stronger gains in home values and thus home equity levels should boost both discretionary and ‘need-to-do’ replacement projects for owners staying in place.”  

“Annual spending for home improvements and maintenance is projected to grow from $472 billion today to $477 billion through the third quarter of 2025,” says Abbe Will, Associate Director of the Remodeling Futures Program. “A quick return to growth after a fairly modest downturn ultimately means that residential remodeling and repair expenditures are expected to approach past peak levels moving forward.” 

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. Originally developed in 2007, the LIRA was re-benchmarked in April 2016 to a broader market measure based on the biennial American Housing Survey.

The LIRA is released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University in the third week after each quarter’s closing. The next LIRA release date is January 16, 2025.

https://www.woodworkingnetwork.com/news/woodworking-industry-news/turn-growth-expected-residential-remodeling