After enduring a post-pandemic dip, expenditures nationally on home improvement projects are seeing a modest increase that is expected to last well into 2026, according to a new study.
In its Leading Indicator of Remodeling Activity, the Harvard University Joint Center for Housing Studies is reporting that renovation spending will most likely increase by around 2.5% between now and the first quarter of next year.
In dollars, that means the industry will see a record $526 billion in economic activity in the next 12 months.
According to a press release issued by the Harvard group, the post-pandemic spending decrease has given way to “modest gains in the sector this year.”
Increases in the sales of existing homes, the release continues, “are expected to drive slow but steady growth in home remodeling and repair.”
In a statement, Chris Herbert, managing director of the Harvard center, said “high home values and other strong economic indicators have supported an uptick in homeowner improvement spending.”
On a cautionary note, however, Herbert continued: “Economic volatility due to uncertainty surrounding foreign tariffs and falling consumer confidence could well dampen this expected growth.”
The 2.5% increase indicates a first quarter recovery from where the industry stood in late 2023 with a 1% decline, and the spring and summer of last year, when business was off by 2.3%.
Current projections, representing both homeowner improvement and repairs, see a 0.8% to 1.8% increase for the rest of 2025.
Earlier this year the National Association of Home Builders predicted that “an aging housing stock, record levels of home equity, and favorable demographics will create positive growth prospects for the remodeling sector in 2025.”
The “aging housing stock” references senior-age homeowners who may be less inclined to put their homes on the market and more inclined to spend money on home renovation projects.
April 22, 2025
By Garry Boulard
Photo courtesy of Unsplash
