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Experts Predict Home Improvement Spending to Decline by 2024

According to Harvard's Joint Center for Housing Studies, after more than a decade of continuous growth, annual spending on improvements and repairs to owner-occupied homes is expected to decline by early next year.

According to their latest Leading Indicator of Remodeling Activity (LIRA), the report projects that year-over-year expenditures for homeowner improvements and maintenance will post a modest decline of 2.8% through Q1 of 2024.

LIRA 2023 Q1

Higher interest rates and sharp downturns in homebuilding and existing home sales are driving expert projections for sluggish remodeling activity next year. With ongoing uncertainty in financial markets and the threat of a recession, homeowners are increasingly likely to reduce or delay projects beyond necessary replacements and repairs.

Homeowner improvement and maintenance spending is expected to top out at $458 billion in the coming year, compared with market spending of $471 billion over the past four quarters.

Meanwhile, strong and steady growth in the number of homes permitted for remodeling projects, as well as a slew of federal incentives for energy-efficiency retrofits may buoy remodeling expenditure from steeper declines.

The bars in the LIRA chart represent aggregate spending levels in that quarter plus what was spent in the prior three quarters (i.e. the value of the bar for 2021-1 is the accumulated spending that occurred during 2020-Q2, 2020-Q3, 2020-Q4 and 2021-Q1). In this way, Q4 bars in the chart represent the amount of spending during that calendar year.

To read the full report, including more data, charts and methodology, click here.

About Author: Demetria Lester

Demetria C. Lester is a reporter for DS News and MReport magazines with more than eight years of writing experience. She has served as content coordinator and copy editor for the Los Angeles Daily News and the Orange County Register, in addition to 11 other Southern California publications. A former editor-in-chief at Northlake College and staff writer at her alma mater, the University of Texas at Arlington, she has covered events such as the Byron Nelson and Pac-12 Conferences, progressing into her freelance work with the Dallas Wings and D Magazine. Currently located in Dallas, Texas, Lester is an avid jazz lover and likes to read. She can be reached at [email protected].

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