Further Softening Expected for Homeowner Remodeling
Annual expenditures for improvements and repairs to owner-occupied homes are expected to decline at an accelerating rate through the first half of 2024, according to our latest Leading Indicator of Remodeling Activity (LIRA). The LIRA projects that year-over-year spending on homeowner improvements and maintenance will shrink by 2.7 percent through the first quarter of next year and by 5.9 percent through the second quarter, following a slowdown in growth that began in the final quarter of 2022.
Home remodeling activity continues to face strong headwinds from high interest rates, softening house price appreciation, and sluggish home sales. Annual spending on homeowner improvements and repairs is expected to decrease from $486 billion through the second quarter of this year to $457 billion over the coming four quarters.
The ongoing reductions in household moves will cause a decline in the remodeling and repair activity that typically occurs around the time of a home sale. The magnitude of the impact may be offset if owners who are locked into their current homes with ultra-low mortgage rates continue to renovate to meet changing needs or take advantage of new federal incentives for energy-efficiency retrofits.
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For more information, visit the LIRA page of our website.