According to Abbe Will, Senior Research Associate & Associate Project Director of Remodeling Futures at the Joint Center for Housing Studies at Harvard University, after several years of double-digit housing market growth, the amount of money consumers are expected to spend on home repairs and improvements will only grow modestly in 2023.
According to the latest Leading Indicator of Remodeling Activity (LIRA), it now projects a deceleration in annual gains of home renovations and maintenance spending form 16.3% at the close of 2022 and to just 2.6% by the end of 2023.
“Slowdowns in existing home sales, house price appreciation, and mortgage refinancing activity coupled with growing concerns for a broader economic recession will cool home remodeling activity this year,” Will said. “Homeowners are likely to pull back on high-end discretionary projects and instead focus their spending on necessary replacements and smaller projects in the immediate future.”
Still, taking into account new data from the American Housing Survey essentially recalibrated the over market size. During the height of the pandemic, the decisions homeowners made resulted in remodeling and repair spending topping 23.8% over these two years compared with the originally estimated 12.5%.
While the pace of expenditures is expected to slow substantially this year, the LIRA raised its projections for the remodeling market size in 2023 by about $45 billion, or 10.2%, to $485 billion.