MOBILE, AL (March 10, 2022) — Spending on house remodeling is going strong, but the Joint Center for Housing Studies of Harvard University reports growth could be “easing.”
The latest Leading Indicator of Remodeling Activity projects, issued by the Remodeling Futures Program at JCHS, suggests remodeling and maintenance spending will top out in fall 2022 before trending downward.
Although annual home improvement and repair spending could reach $430 billion by the second half of 2022, rising costs of labor and construction materials could discourage remodeling projects.
Rising Costs To Curb Remodel Spending
The rising cost of lumber is driving up the overall cost of construction materials. This, in turn, directly affects budgets for house remodeling and repair.
“The rising costs of labor and construction materials, difficulty retaining contractors,
and climbing interest rates could
discourage owners from undertaking new
or larger remodeling projects.”Abbe Will, Associate Project Director of the Remodeling Futures Program
The price of lumber, a key building material, is more unpredictable today than it has been since the end of World War II, according to recent analysis from the National Association of Home Builders.
About the Leading Indicator of Remodeling Activity
LIRA provides a short-term outlook of national house remodeling, improvement and repair spending.
The indicator projects the annual rate of change in spending for the current quarter and previous year. It helps identify future turning points of the home improvement and repair industry.
Changing Measuring Techniques
The previous two LIRA releases used a smoothing technique to adjust for quickly changing growth rates during the onset of the pandemic.
As rates begin to stabilize, the program is going back to its standard methods for projecting house remodeling and repair spending.
As a result, growth rate projections are higher than previously reported.
