Homeowners Expected to Spend Less on Remodeling Activities in Coming Year, But Increase Projected by 2025

Homeowners are expected to continue spending less on remodeling activities in the coming months, according to a report from the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. Despite a decrease in spending over the past year, researchers predict that total dollars spent on home improvements and maintenance will rise above current levels by the second quarter of 2025.

For the 12-month period ending June 30, Americans spent $468 billion on home improvements, a 3% decrease from the previous year. Looking ahead, researchers project that remodeling outlay will total $466 billion through June 30, 2025, representing a slight decrease of 0.5%.

Factors such as economic uncertainty, weak home sales, and high interest rates have contributed to the slowdown in remodeling activity. However, experts believe that many drivers of spending are starting to firm up again, leading to a more sustainable pace of upgrades and repairs.

Despite the overall decrease in spending, the fourth quarter of 2023 saw an increase in remodeling activity on an annual basis. Home improvement retailer Lowe’s reported that comparable sales were expected to decline throughout 2024, as consumers put off projects due to financial constraints.

The cost of home maintenance has been on the rise, with a Bankrate study showing a 26% increase in annual maintenance costs over the past four years. To help homeowners finance repair activities, the Federal Housing Administration recently made revisions to its 203(k) program, aimed at increasing the volume of loans for home repairs.

Overall, experts predict that the home remodeling slowdown will be relatively mild, with activity stabilizing just below last year’s peak levels. Despite ongoing challenges, homeowners are expected to continue making upgrades and repairs to their homes in the coming months.