A new forecast is predicting a considerable slowing for the remodeling market next year.
According to the latest Leading Indicator of Remodeling Activity data from the Remodeling Futures Program at Harvard’s University’s Joint Center for Housing Studies, annual spending on home improvements and repairs will lose momentum through mid-2027. Year-over-year growth in renovation and repair spending is predicted to slow to only 0.5% in the second quarter of 2027.
“Growth in remodeling permitting and retail spending on building products have flattened recently, suggesting that renovation activity is cooling,” said Rachel Bogardus Drew, director of the Remodeling Futures Program at the Center. “Our forecast suggests this will lead to a third straight quarter of decelerating year-over-year growth, with spending projected to be $519 billion through mid-2027.”
The Harvard forecast is at odds with the National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI) report released earlier this month. The RMI for the second quarter posted a reading of 61, down one point from the previous quarter but still in positive territory with an above-50 reading.
“Despite affordability concerns, rising homeowner equity and an aging housing stock are powering demand for residential remodeling,” said NAHB Chief Economist Robert Dietz. “This is keeping the remodeling market relatively strong despite certain impediments, like the rising cost of building materials. In the latest RMI survey, 74% of remodelers reported that their suppliers have increased prices of materials since March due to higher fuel costs, with the average increase in materials prices over that time being 6.7%.”
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