Harvard Joint Center: Remodeling Activity Likely to Decline

(Chart courtesy of Joint Center for Housing Studies of Harvard University)

Spending for improvements and repairs to owner-occupied homes will likely decrease at a moderate rate over the coming year, the Joint Center for Housing Studies of Harvard University said.

The Harvard JCHS’ Leading Indicator of Remodeling Activity projects annual owner expenditures for home updates and maintenance to decline by 7.7 percent through the third quarter of 2024.

“The ongoing weakness in the housing market caused by high interest rates and low supply of existing homes is expected to weigh on remodeling activity next year,” says Carlos Martín, Project Director of the Remodeling Futures Program at the Center. “Homeowner concerns about the health and direction of the broader economy may also dampen plans for remodeling projects.” 

Abbe Will, Associate Project Director of the Remodeling Futures Program, said the level of annual spending on improvements and repairs is projected to fall from $489 billion today to $452 billion over the coming four quarters. “While the rate of market decline should decelerate significantly in the second part of the year, 2024 is shaping up to be a challenging year for home remodeling,” she said.

The 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.