Home Remodeling Market Expected To Decline by 2024
Following a remarkable period of more than a decade marked by continuous expansion, the annual spending on renovations and repairs for owner-occupied homes is expected to undergo a contraction by early next year, as revealed by our latest Leading Indicator of Remodeling Activity (LIRA). The LIRA forecasts a modest decline of 2.8 percent in year-over-year expenditures for homeowner improvements and maintenance, extending through the first quarter of 2024.
The decline in the remodeling market can be attributed to higher interest rates, alongside significant downturns in homebuilding and existing home sales. These factors contribute to the projection of sluggish remodeling activity for the upcoming year. Given the ongoing uncertainty in financial markets and the looming possibility of a recession, homeowners are increasingly inclined to reduce or delay projects, limiting their focus to essential replacements and repairs.
While homeowner improvement and maintenance spending are expected to peak at $458 billion in the next year, as compared to the market spending of $471 billion over the past four quarters, there are still factors that may provide some relief and prevent steeper declines. The growth in the number of homes obtaining permits for remodeling projects remains strong and steady, indicating potential future activity. Furthermore, a range of federal incentives promoting energy-efficiency retrofits may also play a role in sustaining remodeling expenditures.
In order to effectively navigate the declining market and maximize their chances of securing remodeling projects, remodelers can greatly benefit from enlisting the services of cost conscious lead generation providers. By partnering with lead generation service providers, remodelers can save valuable time and effort for nurturing their existing customers. This partnership allows remodelers to focus on what they do best—delivering high-quality remodeling services—while leaving the task of lead generation in the hands of experienced professionals who can adapt to the shifting market conditions. By capitalizing on the assistance of lead generation service providers, remodelers can effectively navigate the market, increase their visibility, and secure a steady flow of projects, ultimately thriving amidst the decline.
Original article posted by: Abbie Will – Senior Research Associate & Associate Project Director, Remodeling Futures. Harvard University.