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Economic uncertainty is making it difficult for remodeling activity to grow, according to a new report from Harvard’s Joint Center for Housing Studies.

Annual spending for home improvements and maintenance to owner-occupied homes are projected to remain steady through 2025 and into the middle of 2026, according to the Joint Center for Housing Studies’ Leading Indicator of Remodeling Activity (LIRA). The LIRA projects that year-over-year spending on home renovation and repair will rise by 2.4 percent in early 2026 before falling by 1.9 percent in the third quarter of next year.

The predictions come despite a modest surge in refinance activity tied to falling mortgage rates.

“Upward trends in both remodeling permit activity and single-family home sales suggest that demand for home improvement will remain stable in the coming year,” Rachel Bogardus Drew, director of the Remodeling Futures Program at the JCHS said in a statement. “Despite the modest pace, total homeowner remodeling spending is expected to reach $524 billion in early 2026, a new record high.”

But in 2027, remodeling activity could grow. The potential for growth is limited due to a lack of construction and uncertainty in the U.S. economy.

“If the housing market begins to show signs of momentum, remodeling could be poised for stronger growth into 2027,” Chris Herbert, managing director of the JCHS, said in a statement. “However, sluggish housing starts and uncertainty in the broader economy, which are factors in predicting remodeling expenditures, are creating headwinds to larger gains in renovation and repair spending.”

The Leading Indicator of Remodeling Activity provides a short-term outlook of national home improvement and repair spending to owner-occupied homes.

Image courtesy of the Harvard Joint Center for Housing Studies

Remodeling Activity Stunted Due to Economic Uncertainty

by Sam Lattof time to read: 1 min
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