JCHS: Remodeling Boom to Peak During 2022

After projected double-digit gains for the first three quarters of 2022, the Joint Center for Housing Studies of Harvard University forecasts remodeling spending will begin to decelerate towards more sustainable growth levels.

Spending for home improvements and repairs is expected to peak during 2022, according to the Leading Indicator of Remodeling Activity (LIRA). The LIRA, released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University (JCHS), projects double-digit gains in annual homeowner renovation and maintenance expenditure will top out in the third quarter of 2022 before beginning a deceleration towards “more sustainable rates of growth.”

“Strong increases in home sales activity, household incomes, and home equity levels are supporting a faster expansion of the home remodeling market over the coming year,” Carlos Martín, project director of the Remodeling Future Program at the JCHS, said in a prepared statement. “As owners continue to navigate the ups and downs of the pandemic’s trajectory, the docs on home improvements for changing wants and needs remain in sharp relief.”

While annual owner improvement and repair spending could reach $430 billion by the second half of 2022, several headwinds may temper growth expectations for the year. The rising costs of labor and construction materials, difficulty retaining contractors, and rising interest rates could discourage owners from undertaking remodeling projects, according to the JCHS.