JCHS: Slower Growth Projected for Remodeling into Next Year

Annual expenditures for improvements and maintenance to owner-occupied homes are expected to soften in 2026, according to the Leading Indicator of Remodeling Activity (LIRA) released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects that year-over-year spending for home renovation and repair will increase by just 1.2 percent by the second quarter of 2026.

“Weakness in the current housing market is expected to have a dampening effect on home improvement spending,” says Rachel Bogardus Drew, Director of the Remodeling Futures Program at the Center. “Slowing construction starts and remodeling permitting activity, which are key factors in predicting future remodeling expenditures, are also putting downward pressure on home improvement growth.”

“It will be important to keep an eye on whether the housing market shows any sign of rebound in the second half of the year, to assess if this slowdown is the beginning of a more significant downturn,” says Chris Herbert, Managing Director of the Center. “However, federal cuts to incentives for home energy improvements could spur an increase in remodeling activity in the short term, as homeowners seek to take advantage of programs before they disappear.”

The Leading Indicator of Remodeling Activity (LIRA) provides a short-term outlook of national home improvement and repair spending to owner-occupied homes. The indicator, measured as an annual rate-of-change of its components, is designed to project the annual rate of change in spending for the current quarter and subsequent four quarters, and is intended to help identify future turning points in the business cycle of the home improvement and repair industry. Originally developed in 2007, the LIRA was re-benchmarked in April 2016 to a broader market measure based on the biennial American Housing Survey.

The LIRA is released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University in the third week after each quarter’s closing. The next LIRA release date is October 16, 2025.

The Remodeling Futures Program, initiated by the Joint Center for Housing Studies in 1995, is a comprehensive study of the factors influencing the growth and changing characteristics of housing renovation and repair activity in the United States. The Program seeks to produce a better understanding of the home improvement industry and its relationship to the broader residential construction industry.

The Harvard Joint Center for Housing Studies strives to improve equitable access to decent, affordable homes in thriving communities. We conduct rigorous research to advance policy and practice, and we bring together diverse stakeholders to spark new ideas for addressing housing challenges. Through teaching and fellowships, we mentor and inspire the next generation of housing leaders.

Contact:

Kerry Donahue – Media Contact – kerry_donahue@harvard.edu – (617) 495-7640

Source: The Harvard Joint Center for Housing Studies