CAMBRIDGE, MA. – Growth in remodeling, improvement, and repair expenditures to owner-occupied homes is expected to remain solid throughout the year and into 2022, according to the Leading Indicator of Remodeling Activity (LIRA) released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects a healthy pace of mid-single digit gains in annual home renovation and repair spending this year, with 4.8% growth by the first quarter of next year.
“With a financial boost from recent federal stimulus payments and strong house price appreciation, homeowners are continuing to invest in the upkeep and improvement of their homes,” says Chris Herbert, Managing Director of the Joint Center for Housing Studies. “This lift in incomes and ongoing strength of the housing market are providing homeowners incentives to make even greater investments in their homes this year.”
“Although the recent surge in DIY activity is slackening as the economy continues to open up, homeowners are undertaking larger discretionary renovations that had been deferred during the pandemic,” says Abbe Will, associate project director in the Remodeling Futures Program at the Center. “A shift to more professional projects should boost annual homeowner remodeling expenditures to $370 billion by early next year.”
A report from October 2020 showed that residential remodeling had continue a steady expansion and was no longer in a downward projection due to the COVID-19 pandemic.
The Leading Indicator of Remodeling Activity (LIRA) provides a short-term outlook of national home improvement and repair spending to owner-occupied homes. The indicator, measured as an annual rate-of-change of its components, is designed to project the annual rate of change in spending for the current quarter and subsequent four quarters, and is intended to help identify future turning points in the business cycle of the home improvement and repair industry. Originally developed in 2007, the LIRA was re-benchmarked in April 2016 to a broader market measure based on the biennial American Housing Survey.