Slight Gains in 2020 Outlook for Residential Remodeling

Thursday, January 16, 2020 | Abbe Will

National spending for improvements and repairs on owner-occupied homes is expected to rise only modestly this year, according to our latest Leading Indicator of Remodeling Activity (LIRA). The LIRA projects that home remodeling expenditures will increase by just 1.5 percent in 2020 compared with annual gains of 5–7 percent in recent years.

While homebuilding and sales activity are now firming, softness from earlier last year will continue to pull on remodeling spending growth in 2020. However, the slowdown should begin to moderate by year-end as today’s healthier housing market indicators will ultimately lead to more home renovation and repair.

A 2020 growth projection of less than 2 percent is certainly lackluster for the remodeling market, especially given historical average annual growth of about 5 percent. Even so, homeowner improvement and repair expenditures are still set to expand this year to over $330 billion.

Column and line chart providing quarterly historical estimates and projections of homeowner improvement and repair spending from 2017-Q4 to 2020-Q4 as four-quarter moving sums and rates of change. Year-over-year spending growth ranged from 6.0-7.0% through 2019-Q3 and is projected to steadily decelerate to 0.4% growth by 2020-Q3 before ticking up again in 2020-Q4. Annual spending levels are expected to increase from $292 billion in 2017 to $333 billion in 2020.

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

Read More About: Remodeling
Abbe Will

Abbe Will

Research Associate & Associate Project Director, Remodeling Futures

Abbe Will manages and contributes research to the Improving America’s Housing report and research brief series and administers the quarterly Leading Indicator of Remodeling Activity (LIRA)....

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