Key takeaways
- Remodeling growth is expected to slow in 2026, with the Harvard Joint Center for Housing Studies projecting year-over-year remodeling and repair spending growth to slow from 2.9% early in the year to 1.6% by year-end.
- Homeowners are still on track to spend a record $522 billion on improvements by the end of 2026.
- If interest rates ease, the report says that could lift construction activity and sales of building materials.
Remodeling activity is projected to slow this year as home sales remain sluggish and construction material costs remain elevated, a new report found. But even a modest uptick in work should push spending to new highs.
After plunging from pandemic-era growth in 2022 through 2024, remodeling activity picked up in 2025, hitting a high at the close of the year, according to the Leading Indicator of Remodeling Activity from Harvard’s Joint Center for Housing Studies. However, the report expects growth to ebb in 2026, contracting from a projected 2.9% in the first months of the year to 1.6% in the final months.
It's activity that largely parallels slower single-family home sales and residential permitting. But, after dipping in recent years, both figures have been ticking back up — with existing-home sales hitting a nearly three-year high — widening the project pool for remodelers. So, even with slowing remodeling activity on the forecast, the joint center projects annual homeowner improvement spending to hit $522 billion. In pandemic-inflected years where remodeling activity has posted double-digit growth, that spending hit highs of $515 billion, so the center’s current 2026 projections aren’t anything to sneeze at.
“Remodeling trends closely track the health of the broader housing market,” Chris Herbert, the joint center's managing director, said in a statement. "If interest rates begin to ease, that could provide a much-needed boost to both housing construction and retail sales of building materials, which for now continue to pose significant headwinds to homeowner improvement spending."
Harvard’s report comes on the heels of home improvement platform Angi naming a user preference for home renovation in its 2025 State of Home Spending Report. The platform called high-spending millennial homeowners the “renovation generation,” a reflection of locked-in homeownership.
“The idea of renovate vs. relocate impacts a homeowner’s decision on what home they choose and how that space can be adapted over time,” Angi cofounder Angie Hicks told Homes.com over email. “Since homeowners are living in their homes five years longer than expected, they need to think about how to make their home fit a changing lifestyle.