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LIRA
The State of the Nation’s Housing 2025
Accessory Dwelling Units

Housing Perspectives

Remodeling Growth Set to Downshift in Late 2026

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Revised April 15, 2026

Annual spending on improvements and maintenance to owner-occupied homes is expected to gradually slow through 2026, according to our latest Leading Indicator of Remodeling Activity (LIRA). The LIRA projects that year-over-year growth in home renovation and repair spending will be 2.1 percent in the middle of this year before easing to 1.6 percent growth by the end of the year.

Single-family home sales and permitting activity have picked up modestly from very low levels, which should support a nominal increase in remodeling activity this year. Even with some deceleration later in the year, overall annual homeowner spending on improvements is expected to reach $518 billion by the end of 2026.

Remodeling trends closely track the health of the broader housing market. If interest rates begin to ease, that could provide a much-needed boost to both housing construction and retail sales of building materials, which for now continue to pose significant headwinds to homeowner improvement spending.

Column and line chart providing quarterly historical estimates and projections of homeowner improvement and repair spending from 2023-Q1 to 2026-Q4 as four-quarter moving sums and rates of change. Year-over-year spending growth declined from 20.0% in 2023-Q1, softening rapidly down to -1.0% by 2023-Q4. Year-over-year spending declined in 2023-Q4 through 2025-Q1, bottoming out at a rate of -2.6% in 2024-Q3. Annual rates of change turned positive again beginning in 2025-Q2 and are expected to climb from 1.6% in 2026-Q1 to 2.1% in 2026-Q2 before decelerating to 1.6% in 2026-Q4. Annual spending levels are expected to increase from $509 billion in 2025-Q4 to $518 billion in 2026-Q4.

PLEASE NOTE: Due to delayed and missing data resulting from the 2025 federal government shutdown, adjustments were made to the January 2026 LIRA methodology. For the October 2025 CPI (BLS), we applied the year-over-year change in the Cleveland Fed’s Revised 16% Trimmed Mean CPI to the October 2024 CPI. For November 2025 new single-family housing starts (Census), we applied the October 2024–2025 rate of change in starts to the November 2024 starts, consistent with our standard imputation method for the final month of each quarter. In addition, we used actual (rather than imputed) December values from the National Association of Realtors for existing single-family home sales and median sales price. 

REVISION 4/15/26: This release replaces the prior 2025 Q4 release dated January 26, 2026 to correct an error in the formula used to estimate the annual rate of growth in remodeling spending for 2025 Q4 and 2026 Q1, which omitted some model inputs and elevated projected growth rates and remodeling spending in those quarters.

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

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