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January 19, 2024
Spending for residential improvements and repairs is expected to shrink this year for the first time since 2010, but signs point to some easing of declines by year’s end, according to the latest Leading Indicator of Remodeling Activity (LIRA) from Harvard University's Joint Center for Housing Studies.
The LIRA projects that declines in annual homeowner renovation and maintenance expenditure will worsen through the third quarter of this year before moderating slightly to -6.5% by the end of 2024.
Home remodeling will continue to suffer this year from a perfect storm of high prices, elevated interest rates and weak home sales. These headwinds create considerable uncertainty in the economy, and remodeling spending is projected to fall from $481 billion last year to $450 billion in 2024.
Even with the anticipated downturn, spending for improvements and repairs to owner-occupied homes this year is expected to easily surpass the robust levels seen early in the pandemic. Recent improvements in homebuilding and mortgage rates also support the prospect of turning a corner on the rate of remodeling spending losses by the end of the year.
The Harvard Joint Center for Housing Studies strives to improve equitable access to decent, affordable homes in thriving communities. They conduct research to advance policy and practice and bring together stakeholders to spark new ideas for addressing housing challenges.
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