Annual expenditures for improvements and maintenance to owner-occupied homes are expected to soften in 2026, according to the latest Leading Indicator of Remodeling Activity (LIRA). The LIRA, which is created by the Harvard Joint Center for Housing Studies, projects that year-over-year spending for home renovation and repair will increase by just 1.2% by the second quarter of 2026.
Weakness in the current housing market is expected to have a dampening effect on home improvement spending. Slowing construction starts and remodeling permitting activity, which are key factors in predicting future remodeling expenditures, are also putting downward pressure on home improvement growth.
According to the LIRA, it will be important to keep an eye on whether the housing market shows any sign of rebound in the second half of the year, to assess if this slowdown is the beginning of a more significant downturn. However, federal cuts to incentives for home energy improvements could spur an increase in remodeling activity in the short term, as homeowners seek to take advantage of programs before they disappear.