U.S. home-improvement and repair spending is expected to edge up only modestly through 2027, even as remodeler surveys signal steadier business than weak home sales and construction data suggest.
The Harvard University Joint Center for Housing Studies said Oct. 22 that annual spending on improvements and repairs to owner-occupied homes should remain near $525 billion through the third quarter of 2027. Its outlook puts year-over-year growth at 1.5% for that quarter. The estimates are in current dollars and exclude rental properties.
Housing demand and construction have weakened. The National Association of REALTORS® (NAR) said pending home sales fell 7.3% in September from August and stood 11.3% below the year-earlier level. Each of the four regions recorded a decline. NAR Chief Economist Lawrence Yun cited quickly rising mortgage rates as one factor.
The U.S. Census Bureau estimated privately owned housing starts at a seasonally adjusted annual rate of 1,221,000 in September. That was 5.2% below August, with a ±11.8% margin, and 7.4% below September 2025, with a ±11.5% margin. Building permits ran at an annual rate of 1,400,000, down 0.2% from August and 3.0% from a year earlier.
Remodeler sentiment was firmer. The National Association of Home Builders (NAHB) reported its Remodeling Market Index at 62 in the third quarter, one point higher than in the second quarter. A score above 50 means more respondents view conditions favorably than unfavorably; the current-conditions reading was 70 and the future-indicators reading was 54.
Houzz’s Expected Business Activity Indicator for construction firms increased to 74 in the fourth quarter from 61 in the third. It was the measure’s strongest showing since early 2022. The survey, conducted Oct. 2-13 among nearly 1,000 construction and design firms on Houzz, asked about expected client inquiries and newly secured projects.
NAHB Remodelers Chair Elliott Pike said some remodelers face material costs and staffing gaps that can push project schedules back. NAHB Chief Economist Robert Dietz said interest rates generally weigh less on remodeling than on new construction. He also linked labor shortages and longer timelines to immigration enforcement and competition from data-center construction. Marine Sargsyan, head of economic research at Houzz, said some firms add fuel expenses to client bills, while others absorb them through lower margins.
The indicators track different things: Harvard estimates spending, while NAHB and Houzz survey businesses about conditions and expectations. NAR is scheduled to release its October pending home sales index Nov. 18 at 10 a.m. ET. Harvard’s next remodeling outlook is due Jan. 21, 2027.
