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LIRA
The State of the Nation’s Housing 2025
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Housing Perspectives

Remodeling Expected to Continue Slow but Steady Growth Into Next Year

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Annual expenditures for improvements and maintenance to owner-occupied homes are projected to remain steady through the end of this year and into the middle of 2026, according to our latest 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 easing to 1.9 percent in the third quarter of next year.

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. Despite the modest pace, total homeowner remodeling spending is expected to reach $524 billion in early 2026, a new record high.

If the housing market begins to show signs of momentum, remodeling could be poised for stronger growth into 2027. 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.

Column and line chart providing quarterly historical estimates and projections of homeowner improvement and repair spending from 2022-Q4 to 2026-Q3 as four-quarter moving sums and rates of change. Year-over-year spending growth declined from a peak of 26.6% in 2022-Q4, softening rapidly down to -1.0% by 2023-Q4. Year-over-year spending declined in 2023-Q4 through 2024-Q4, bottoming out at a rate of -2.6% in 2024-Q3. Annual rates of change turned positive again beginning in 2025-Q1 at 0.0% and are expected to accelerate to 1.9% through 2026-Q3. Annual spending levels are expected to increase from $507 billion in 2025-Q3 to $517 billion in 2026-Q3.

For more information, visit the LIRA page of our website.

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