Residential Remodeling Seen Posting ‘Modest’ Growth in 2021
CAMBRIDGE, MA — Annual gains in spending for improvements and repairs to owner-occupied homes are expected to be “modestly higher” this year compared to 2020, according to the Leading Indicator of Remodeling Activity (LIRA), released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
The LIRA projects an uptick in year-over-year growth of home renovation and repair expenditure from 3.5% at the close of 2020 to 3.8% by year-end 2021, Harvard University analysts said.
“The remodeling market continues to benefit from a strong housing market, including accelerating growth in homebuilding, sales and home equity,” observed Chris Herbert, managing director of the Cambridge, MA-based Joint Center for Housing Studies. “In addition to routine replacement-and-repair projects, homeowners are likely to pursue more and larger discretionary home improvements this year as the broader economy recovers.”
The Joint Center projected the residential remodeling market to gain by about $4 billion, or 1%, to a level of $352 billion in 2021.
The Leading Indicator of Remodeling Activity provides a short-term outlook of national home improvement and repair spending to owner-occupied homes. The LIRA, measured as an annual rate-of-change of its components, is designed to project the annual rate of change in spending for the current quarter and subsequent four quarters, and is intended to help identify future turning points in the business cycle of the home improvement industry.