Spending for residential improvements and repairs is expected to decline this year for the first time since 2010, although signs point to some easing of declines by year’s end, according to the Leading Indicator of Remodeling Activity (LIRA), a quarterly gauge of national home improvement and repair spending to owner-occupied homes.
The latest LIRA, released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, projects that declines in annual homeowner renovation and maintenance expenditure will worsen through the third quarter of 2024 before moderating slightly to -6.5 percent by year’s end.
Fourth Quarter 2023 — Leading Indicator of Remodeling Activity
“Home remodeling will continue to suffer this year from a perfect storm of high prices, elevated interest rates, and weak home sales,” said Carlos Martín, project director of the Remodeling Futures Program at the Cambridge, MA-based Joint Center.
“These headwinds create considerable uncertainty in the economy,” said Martin, forecasting that remodeling will fall from an annual total of $481 billion last year to $450 billion in 2024.
“Even with the anticipated downturn, spending for improvements and repairs to owner-occupied homes this year is expected to easily surpass the robust levels seen early in the pandemic,” observed Abbe Will, associate project director of the Remodeling Futures Program.
“Recent improvements in homebuilding and mortgage rates also support the prospect of turning a corner on the rate of remodeling spending losses by the end of the year,” Will added. QR