If you’re timing a major home renovation, addition, or “finally fix this house” project in 2026, here’s the headline: the remodeling market is still expected to grow, but the pace of growth is projected to slow by late 2026.
That’s not DIY talk — it’s “renovation economy” news. And it’s useful because it affects what homeowners care about most: contractor availability, pricing pressure, lead times, and how aggressive you need to be to get on a schedule.
At Modern Living Real Property, we specialize in breathing new life into properties — turning neglected houses into coveted homes. If you’re deciding whether to renovate now or wait, understanding the 2026 outlook can help you set expectations and plan smarter.
What the forecast actually says
Harvard’s Joint Center for Housing Studies (JCHS) publishes a well-known remodeling outlook called the Leading Indicator of Remodeling Activity (LIRA). Their latest update projects that year-over-year growth in homeowner improvement and repair spending will be about 2.9% early in 2026, then ease to about 1.6% by the end of 2026. They also project annual homeowner spending reaching roughly $522 billion by the end of 2026.
Read the release here (great reference to share with decision-makers):
JCHS LIRA: Remodeling Growth Set to Downshift in Late 2026
Translation: this is still a very active remodeling environment — just not accelerating the way it did during peak boom periods.
Why the downshift is happening (the “renovation economy” drivers)
1) Remodeling follows the housing market — and the housing market is still rate-sensitive
JCHS notes that remodeling trends closely track the broader housing market. When interest rates stay higher, it can weigh on big-ticket upgrades that homeowners often finance — and it can keep housing turnover modest, which changes what kinds of projects get prioritized.
2) Costs are still a top concern (materials + labor)
Homeowners aren’t necessarily canceling — but they’re watching costs closely. In the 2026 U.S. Houzz Renovation Plans Report, more than 9 in 10 homeowners say they plan to move forward, but the #1 expected challenge is rising product and material costs — followed by higher labor costs and finding available pros.
3) The “need-to-do” projects keep the floor strong, even when discretionary remodels cool
Industry outlooks continue to emphasize that homeowners are staying active, but more value-focused — with needs-based replacements and maintenance holding up well. The Home Improvement Research Institute (HIRI) describes a market where big discretionary upgrades can be more selective while spending broadens over time as conditions stabilize.
Helpful forecast overview:
HIRI: Home Improvement Market Forecast (2025–2029)
4) Long-term demand is supported by aging homes + homeowner equity
Even with slower growth, there are structural reasons remodeling stays strong: older housing stock, accumulated equity, and more aging-in-place upgrades. NAHB’s Remodeling Market Index commentary specifically points to those supports going into 2026.
Reference:
NAHB: Remodeling Market Sentiment Strengthens (RMI)
For a bigger-picture report on why the remodeling market remains elevated relative to pre-pandemic levels, JCHS’s “Improving America’s Housing” series is a strong read:
Improving America’s Housing (JCHS)
What this means if you’re planning a major remodel in 2026
Here’s the practical decision-making angle: a late-2026 downshift can reduce some pressure — but it doesn’t automatically mean “cheap” or “easy.” It’s better to think of it as a shift from “everyone is slammed” to “slightly more negotiable,” depending on your market and your project type.
What may get easier later in 2026
- Scheduling: you may have more options for start dates if demand cools modestly.
- Bidding: you might get more responsive estimates and fewer “no-bid” situations.
- Change-order tolerance: some contractors may be less rigid if pipelines loosen (not guaranteed, but possible).
What may not get easier
- Material volatility: pricing can still move around based on supply chains and policy changes.
- Skilled labor constraints: good trades stay booked because demand doesn’t disappear — it just shifts.
- Permitting timelines: city review cycles often don’t care about market forecasts.
How to time bigger projects and set expectations with contractors
1) Separate “design time” from “build time”
If you’re thinking about a 2026 build, the best move is often to start planning sooner than you think: scope, layout decisions, finish level, and permit path. The more decisions you lock early, the fewer expensive pivots you’ll make mid-build.
2) Use the downshift strategically: bid earlier, schedule smarter
- If you want a spring/summer build, expect the most competition for contractor schedules.
- If you can start late summer/fall, you may benefit from slightly better availability — especially if you’re flexible on start date.
3) Budget like a pro: plan for the “real” costs
A solid budget is not just materials + labor. It includes:
- Permits and plan review fees
- Temporary living adjustments (if the kitchen or bathrooms are down)
- Lead-time risk (special-order items)
- A contingency for surprises once walls open
4) Ask contractors the questions that reveal schedule risk
- “What’s your realistic start window?”
- “What trades do you self-perform vs subcontract?”
- “What items commonly delay your projects right now?”
- “How do you handle selections and change orders?”
5) Lock the right things early (and stay flexible on the rest)
For many projects, the biggest delays come from a short list of items: cabinets, windows/doors, specialty tile, custom fixtures, and any made-to-order finish. If you’re doing a major renovation, identify the long-lead items early and build the schedule around them.
Bottom line: a slower growth rate doesn’t mean the market is “slow”
The 2026 outlook is best described as: still strong, but cooling. That’s helpful for homeowners because it can reduce the panic factor — you can plan thoughtfully instead of rushing — but you should still expect professional remodeling to be a capacity-driven business where the best teams stay in demand.
If you’re weighing a major renovation, a layout rework, or a full property transformation, explore our work in Properties and more planning-friendly guidance in Helpful Tips. When you’re ready to talk next steps, reach out here: Contact Modern Living Real Property.