October 30, 2025
Remodeling remains dependable for the home building construction industry despite some indications it may be slowing. Harvard’s Joint Center on Housing Studies recently released a new report indicating that annual expenditures for improvements and maintenance to owner-occupied homes are projected to remain steady through the end of this year and into the middle of 2026.
Lower mortgage rates have some believing it will lead to increased home buying, and with 98 percent of the stock made up of existing homes, which will lead to more renovations.
“We think that’s going to help unlock some of the pent-up demand from buyers and get them off the sideline,” Joint Center on Housing Studies Director, Remodeling Futures Program Director Rachel Drew told Marketplace in a recent report.
The center does quarterly reports on the remodeling market because, Drew said, because it covers everything that’s done to existing housing, which constitutes 98 percent of the housing stock.
The National Association of Home Builders also tracks remodeling on a quarterly basis. Its NAHB/Westlake Royal Remodeling Market Index (RMI) for the third quarter posted a reading of 60, up one point compared to the previous quarter. According to the NAHB, the RMI remains solidly in positive territory above 50, but lower than it had been at any time from 2021 through 2024.
“The small quarter-over-quarter improvement in the RMI is consistent with flat construction spending trends and the current wait-and-see demand environment,” said NAHB Chief Economist Robert Dietz. “Going forward, remodeling spending should continue to grow, supported by the aging housing stock and gains for household net worth.”
Existing homes continue to be favored by homeowners because many locked in much lower rates after the pandemic.
Jaime Katz, a senior equity analyst for Morningstar Research Services, told Marketplace that a $15,000 addition is going to be so much less than starting over with a new home.
Yet remodelers do have concerns. Nicole Goolsby Morrison, the NAHB remodeling chair, said the industry is slightly less optimistic than last year because of several factors.
“The most significant headwinds they are facing include high material and labor costs,” Goolsby Morrison said, “as well as economic and political uncertainty making some of their potential customers cautious about moving forward with remodeling projects.”
An Oct. 9 MarketWatch report noted that The Trump administration just announced it would raise tariffs on upholstered furniture, kitchen cabinets, and bathroom vanities by 25% starting next week, with duties rising to as high as 50% in 2026.
The costs of these tariffs are unlikely to show up in the price of home furnishings right away. Typically, the process takes several months.
The MarketWatch report also cited some troubling signs, including the fact that fewer people are searching online for bath- and kitchen-remodeling plans. Jeffry Bartash wrote in the report that “Home Depot and Lowes executives told investors that do-it-yourselfers and other homeowners were spending less on large remodeling projects.”