The Remodeling Market Could Turn in Q4, Says Harvard
Harvard predicts the decline in home improvement spending will turn around at the end of 2024, according to the University’s Joint Center for Housing Studies.
The Center’s Leading Indicator of Remodeling Activity (LIRA) report monitors eight different economic indicators to provide predictions for homeowner renovation and maintenance spending.
The latest LIRA offers a more uplifting projection for the remodeling market compared to the past year, with an increase in spending beginning in the fourth quarter of 2024, from -7.8% four-quarter moving rate of change in Q3 to -6.5% in Q4.
Home improvement spending began to descend in the third quarter of 2023, the first decline since 2010. Still, the Center says spending on home improvements and repairs to owner-occupied homes remain high, and declines are relative to previous quarters. Anecdotally, many in the industry say the remodeling market remains healthy.
Spending is expected to “easily surpass the robust levels seen early in the pandemic,” writes Senior Research Associate & Associate Project Director of Remodeling Futures Abbe Will.
The drops in spending this year compared to previous quarters are a result of high prices, interest rates, and weak home sales, according to Will. Total expenditures in remodeling will fall from $481 billion in 2023 to $450 billion in 2024.
