Annual growth in homeowner spending for improvements and repairs is expected to soften during the first half of 2023 even as the market continues its upward trajectory, according to latest in a series of quarterly reports issued by the Remodeling Futures Program at the Joint Center for Housing Studies at Harvard University.
According to the Joint Center’s Leading Indicator of Remodeling Activity (LIRA), year-over-year gains in remodeling expenditures to owner-occupied homes are projected to decelerate from 17.4 percent in 2022 to 10.1 percent by the second quarter of 2023.
While beginning to soften, however, growth in spending for home improvements and repairs is nevertheless expected to remain well above the market’s historical average of 5 percent, according to Harvard economists, who forecasts annual remodeling expenditures to increase to nearly $450 billion by the first half of next year.
“Slowing sales of existing homes, rising mortgage interest rates and moderating house price appreciation are expected to dampen owners’ investments in home improvements and maintenance over the coming year,” said Carlos Martín, project director of the Remodeling Futures Program at the Cambridge, MA-based Joint Center.
“Steep slowdowns in homebuilding, retail sales of building materials, and renovation permits all also point to a cooling environment for residential remodeling,” Martin added.