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Home improvement and remodeling activity may be growing, but beneath the topline numbers is a market that remains relatively flat.

Homeowners spent approximately $517 billion on maintenance and improvements during the 12 months ending in June 2026, according to Harvard University's Joint Center for Housing Studies. That represents roughly 2% nominal growth from the prior year. Adjust for inflation, however, and spending actually declined slightly.

Does that mean remodeling demand is disappearing? Not necessarily.

Grant Farnsworth sat down with Rachel Drew, Director of the Remodeling Futures Program at Harvard's Joint Center for Housing Studies, to discuss the latest Leading Indicator of Remodeling Activity (LIRA), what's keeping larger projects on hold, and the longer-term forces that could eventually unlock more remodeling activity. From America's record-old housing stock to approximately $35 trillion in accumulated home equity, some of the strongest arguments for future remodeling demand have little to do with today's economic headlines.

What Is the Remodeling Outlook for 2026 and 2027?

Harvard's LIRA measures homeowner spending on improvements and maintenance and forecasts that activity four quarters into the future. The latest forecast points to continued growth, but at a progressively slower rate.

Homeowner improvement and maintenance spending is projected to increase approximately 2.1% in 2026 compared with 2025. Growth is then expected to fall below 1% in the first quarter of 2027 and reach approximately 0.5% by the second quarter.

Technically, that's still growth. Practically, it looks much more like a flat market. And because these figures represent nominal spending, higher labor and material costs are an important part of the story. If prices are increasing while overall spending remains relatively flat, it suggests the volume of remodeling activity itself has declined.

For building product manufacturers and suppliers, that distinction matters. Dollar growth alone does not necessarily indicate greater product demand or more projects taking place.

What Is Driving the Remodeling Forecast?

The LIRA incorporates several indicators that historically correlate with future remodeling activity. Three are particularly important: existing single-family home sales, single-family housing starts, and remodeling permit activity. Each of these 3 indicators tells a different part of the current remodeling story.

1. Existing Home Sales

Homeowners who recently move tend to spend more on remodeling during their first few years in a home. More home sales can therefore create more opportunities for remodeling activity.

Existing single-family home sales have recently shown modest year-over-year growth, but activity remains well below levels historically associated with a healthy housing market. The direction may be improving, but the overall number of transactions is still too low to create a major remodeling catalyst.

2. Single-Family Housing Starts

Single-family housing starts are another important indicator of overall housing market strength and historically correlate with remodeling spending in the following year. Those starts have been declining, creating another headwind for the near-term remodeling forecast.

3. Remodeling Permits

Permitting can provide a window into larger remodeling activity, particularly projects involving structural changes, electrical or plumbing work, additions, and other improvements that require local approval.

After serving as a relative bright spot, remodeling permit activity has also begun to flatten. Together, these indicators help explain why the near-term outlook points toward stability rather than significant growth.

Additional remodeling industry indicators

Beyond these three indicators, we curate additional supply and demand indicators in our Industry Drivers and Forecast Report.

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Maintenance and Repair Are Carrying More of the Market

A slower market does not mean homeowners stop spending on their homes entirely. Instead, the type of work being completed can change.

When economic uncertainty rises, larger discretionary projects are easier to defer. A homeowner might postpone a kitchen remodel or addition, but replacing a failed HVAC system or repairing a leaking roof is another matter. That dynamic helps explain why maintenance and repair activity remains important while larger projects face greater pressure, but it also points toward one of the most significant long-term opportunities for the building products industry.

America's Homes Are the Oldest They've Ever Been

The average U.S. housing unit is now approximately 44 years old, the oldest level observed over the past 30 years. That's an increase of roughly 12 years in only two decades.

And with fewer new homes being added to the housing stock, that average is likely to continue rising.

Building technology has improved, and many products and systems last longer than they once did, but they still don't last forever...

• Roofs eventually need replacing.
• HVAC systems fail.
• Siding deteriorates.
• Paint needs refreshing.
• Plumbing and electrical systems require updates.

At some point, the necessity of repair to the physical condition of an aging home can override the economic conditions that might otherwise cause a homeowner to delay a project. That makes the aging housing stock one of the remodeling industry's most important long-term demand drivers to be watching.

Homeowners Are Staying Put Longer

The age of the home is only one part of the equation. The people living in those homes are staying longer, too. Household mobility has declined substantially, with homeowners remaining in their homes for longer periods than they did in previous decades. That can reduce one traditional trigger for remodeling because moving often leads homeowners to improve a property before selling or make improvements shortly after purchasing.

On the flipside, longer tenure creates another potential trigger. If a homeowner realizes they are likely to remain in their house for another decade rather than another few years, improvements that once seemed unnecessary may become worthwhile. The kitchen they were willing to tolerate for three more years looks very different if they're going to use it for ten. Investing in projects that optimize the space to fit their own lifestyle and personal preferences begin to be perceived as worthwhile.

Could $35 Trillion in Home Equity Unlock Larger Projects?

Homeowners also have another significant resource available when confidence returns - high home equity values. Total U.S. home equity has increased approximately 50% since before 2020, now reaching roughly $35 trillion.

So far, homeowners have been reluctant to tap much of it. Why?

• Higher borrowing costs are one reason.
• Economic uncertainty is another.
• For many households, equity also represents a financial cushion they are hesitant to disturb.

But even a relatively small improvement in borrowing conditions could change that calculation. And when homeowners do extract equity, remodeling and home repair are among the most common uses for those funds.

That creates a potentially powerful combination for future demand: older homes requiring more work, homeowners staying in those homes longer, and substantial accumulated equity that could eventually help finance larger projects.

What Does This Mean for Building Product Manufacturers?

The immediate remodeling outlook remains restrained. Larger discretionary projects are still under pressure, and the demand indicators do not suggest a dramatic near-term rebound, but focusing exclusively on today's growth rate risks missing the structural forces building underneath it.

• America has an aging housing stock.
• Homeowners are moving less frequently.
• Many have accumulated substantial equity.
• Maintenance needs cannot be postponed indefinitely.
• Longer tenure could eventually change the economics of larger improvements.

For manufacturers and suppliers, the question is therefore not simply whether remodeling demand will grow. Now, it's about understanding which projects homeowners cannot defer, which they are choosing to defer, and what will finally trigger those larger investments. Those distinctions will be increasingly important for identifying category opportunities and preparing for the next shift in remodeling demand.

What's Next? Understanding the Older Homeowner and Demand for Aging in Place Projects

Another important piece of the remodeling outlook is the aging homeowner. The Farnsworth Group and Harvard's Joint Center for Housing Studies have been collaborating on research examining older homeowners and the changes they are making to their homes to support accessibility, changing needs, and aging in place, which will be released soon.

That research will help address an important gap in the industry's understanding of how older homeowners are modifying their homes today and what they may need in the years ahead. Stay tuned for more insights as that research becomes available.

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