JCHS predicts decline in homeowner remodeling

The Leading Indicator of Remodeling Activity (LIRA) from the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University projects a decline in annual expenditures for improvements and repairs to owner-occupied homes. The decline is expected to accelerate during the first half of 2024. Year-over-year spending on homeowner improvements and maintenance is estimated to decrease by 2.7% in the first quarter of next year and by 5.9% in the second quarter. This comes after a growth slowdown 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,” said Abbe Will, associate project director of the Remodeling Futures Program. “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,” said Carlos Martín, project director of the Remodeling Futures Program.

“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,” he said.