Is This The End Of The Middle Class Affording Home Renovations?

The U.S. housing market is cooling. Contractors are delaying projects. The pandemic-era DIY boom that fueled record home improvement sales and made weekend renovations feel like the new national pastime has dried up. The latest Leading Indicator of Remodeling Activity (LIRA) study from Harvard's Joint Center for Housing Studies forecasts the sharpest slowdown in renovation spending since the 2008 financial crisis. For years, homeowners have upgraded kitchens, converted basements, and outfitted backyards as their families spent more time at home. But the LIRA isn't just showing a blip in spending. It's signaling a turning point, especially for the middle class. With borrowing costs remaining high and inflation squeezing many household budgets, it's likely the end of the remodeling era. 

"Annual spending on homeowner improvements and repairs is expected to decrease from $486 billion through the second quarter of this year to $457 billion over the coming four quarters," Abbe Will, Associate Project Director of the Remodeling Futures Program, said via the Harvard Joint Center for Housing Studies. Although stabilizing prices and rising inventory are among the housing trends that are great news for anyone buying in 2025, Will went on to explain that softening home sales overall are part of the reason for the decline in home renovation spending. "The ongoing reductions in household moves will cause a decline in the remodeling and repair activity that typically occurs around the time of a home sale," she explained. While the LIRA only offers a short-term outlook, and previous projections were much worse, the latest numbers are sobering. For many middle-class households, although decor trends still dominate our Instagram feeds, remodeling is becoming increasingly out of reach in real life.

Middle-class homeowners haven't totally given up on transforming their spaces, but they are taking fewer swings. As budgets tighten, the projects that do get done are smaller, more utilitarian, and less frequent. Retail data shows certain home improvement categories, like efficient lighting, holding relatively steady and even decreasing in light of rising energy costs and incentivized government and utility programs designed to help struggling families save money. Other upgrades are prioritized out of necessity. For example, although HVAC replacements are getting so expensive, extreme weather and wild temperature fluctuations make climate-controlled spaces a non-negotiable. When the furnace dies or air conditioning gives out, middle-class families are still finding ways to cover those costs, even if it means keeping those more aesthetic upgrades pinned to a mood board.

For homeowners of every income level, tariffs are also putting major renovations even further out of reach. Many might want to upgrade cabinets and flooring in anticipation of tariffs, but as the country's major trade partners start to feel the pinch, it's already too late. Imported luxury vinyl tile planks and ceramic tiles are especially vulnerable to tariff-driven price hikes, and even domestically produced laminates, hardwoods, and carpets aren't totally immune to rising costs throughout the supply chain. Full-fledged kitchen renovations also remain out of reach, as imported natural stone countertop materials and lumber used for cabinets are spiking. Renovations have long been ideal routes to building equity and ensuring high return on investment, but now more than ever, middle-class families find themselves paying way more for a lot less.