Remodeling Activity Expected to Go From 16.3% to 2.6% This Year
Cambridge, MA, January 19, 2023--After several years of double-digit gains, expenditures for improvements and repairs to the owner-occupied housing stock are expected to grow only modestly in 2023, according to the Leading Indicator of Remodeling Activity (LIRA) released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
The LIRA projects a steep deceleration in annual gains of home renovation and maintenance spending from 16.3% at the close of 2022 to 2.6% by year-end 2023 amid slowdowns in existing-home sales, house price appreciation and mortgage refinancing activity, coupled with growing concerns for a broader economic recession.
However, the release of new benchmark data from the American Housing Survey recalibrates the overall market size.
“The massive pandemic-induced changes in housing and lifestyle decisions fueled remodeling and repair spending in 2020 and 2021, growing 23.8% over these two years compared with the 12.5% originally estimated,” says Abbe Will, associate project director of the Remodeling Futures Program. “While the pace of expenditures is expected to slow substantially this year, we’ve raised our projection for the remodeling market size in 2023 by about $45 billion, or 10.2%, to $485 billion.”