Navigating an erratic market since the first months of the Covid 19 outbreak, the home improvement industry appears headed for more stable times heading into the middle of next year, says a new report.
Using a measurement tool called the Leading Indicator of Remodeling Activity, the Harvard Joint Center for Housing is predicting that annual spending for the home improvements and maintenance market is slated to jump from a current $454 billion to around $477 billion by the fall of 2025.
“A continued thaw in new home construction and sales of existing homes bodes well for an uptick in residential improvement and repairs next year,” said Carlos Martin in a statement.
The director of the Remodeling Futures Program at the Harvard center, Martin added that “Stronger gains in home values and thus home equity levels should boost both discretionary and ‘need-to-do’ replacement projects for owners staying in place.”
In the wake of a 2020 and 2021 home remodeling explosion due to millions of residents working virtually, the home improvement industry subsequently experienced an unrelenting nosedive from the spring of 2023 to this summer.
Exact numbers saw a drop from an unprecedented high of $487 billion to April of 2023 to $454 billion today.
Originally developed in 2007, the Leading Indicator of Remodeling Activity index is designed to provide a “short-term outlook of national home improvement and repair spending to owner-occupied homes.”
Harvard’s latest home remodeling numbers come after a late summer Home Depot earnings report showing a drop of 3.3% in sales during the third quarter for a total of $43.1 billion. Lowe’s Home Improvement, meanwhile, reported sales of $23.6 billion for a 5.1% decrease.
By Garry Boulard
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