​The Leading Indicator of Remodeling Activity (LIRA), developed by Harvard’s Joint Center for Housing Studies, offers a short-term forecast of national spending on home improvements and repairs for owner-occupied homes. By analyzing a weighted average of eight key economic indicators—including home sales, housing starts, retail sales at building material suppliers, and home prices—LIRA estimates the annual rate of change in remodeling expenditures over a four-quarter horizon. This tool aids in identifying potential turning points in the home improvement business cycle and is updated quarterly. Notably, LIRA focuses exclusively on owner-occupied properties, excluding rental units from its projections. ​
As of April 2025, LIRA projects a modest 2.5% increase in home renovation and repair spending, reaching a record $526 billion by the first quarter of 2026. This growth follows a period of decline in 2024, attributed to high interest rates and economic uncertainty. Factors such as a solid labor market, rising home values, and improved home sales are contributing to the anticipated uptick in remodeling activities. However, ongoing economic volatility, including concerns over foreign tariffs and consumer confidence, may temper this growth.
