Remodeling Spending Expected to Soften in 2026

Annual spending for home remodeling is expected to soften in 2026, 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.

“Weakness in the current housing market is expected to have a dampening effect on home improvement spending,” says Rachel Bogardus Drew, director of the remodeling futures program at the center. “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.”

The LIRA predicts a 1.2% year-over-year increase in spending for home renovation and repair by the second quarter of 2026.

“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,” says Chris Herbert, managing director of the center. “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.”