Home Remodeling Spending Growing But Slowing
Following another red hot year, annual growth in homeowner spending for improvements and repairs is expected to soften during the first half of 2023, according to the Leading Indicator of Remodeling Activity. They are projecting year-over-year gains in remodeling expenditures to owner-occupied homes will decelerate from 17.4 percent this year to 10.1 percent by the second quarter of 2023.
“Slowing sales of existing homes, rising mortgage interest rates, and moderating house price appreciation are expected to dampen owners’ investments in home improvements and maintenance over the coming year,” says Carlos Martín, Project Director of the Remodeling Futures Program at the Center. “Steep slowdowns in homebuilding, retail sales of building materials, and renovation permits all also point to a cooling environment for residential remodeling.”
“While beginning to soften, growth in spending for home improvements and repairs is expected to remain well above the market’s historical average of 5 percent,” says Abbe Will, Associate Project Director of the Remodeling Futures Program. “In the first half of 2023, annual remodeling expenditures are still set to expand to nearly $450 billion.”