Annual expenditures for remodeling on owner-occupied homes is expected to soften in 2026, according to the Leading Indicator of Remodeling Activity (LIRA), recently 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% by the second quarter of 2026.
“Weakness in the current housing market is expected to have a dampening effect on home improvement spending,” said 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.”
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. Originally developed in 2007, the LIRA was re-benchmarked in April 2016 to a broader market measure based on the biennial American Housing Survey (AHS), and is released the third week after each quarter’s closing.
“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,” said 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.”
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