As 2025 progresses, homeowner spending on remodeling and home improvement projects has shown remarkable resilience, continuing to hold steady despite a backdrop of economic uncertainties. According to the latest data from the Joint Center for Housing Studies (JCHS), the Leading Indicator of Remodeling Activity (LIRA) projects modest growth in spending for the upcoming year. This growth, although tempered, signals that homeowners are not abandoning their remodeling plans altogether, even in the face of inflationary pressures, elevated interest rates, and broader macroeconomic challenges.
One of the most significant trends in the remodeling sector is the shift away from larger, high-cost projects that characterized the post-pandemic remodeling boom. The demand for full kitchen overhauls, major home additions, and expansive structural renovations has cooled somewhat. Homeowners are opting instead for more focused, smaller-scale upgrades, particularly in areas like kitchens, bathrooms, energy efficiency, and accessibility. These projects typically require a smaller upfront investment, involve less disruption, and can still yield significant improvements in both the functionality and aesthetic appeal of a home. This shift suggests a new wave of homeowners who, rather than opting for major overhauls, are choosing to enhance and optimize their existing living spaces in more manageable, sustainable ways.
Recent data from Houzz Inc. sheds light on this trend, showing that median spending on major kitchen remodels under 200 square feet increased by 9% from 2023 to 2024. This reflects the continued desire among homeowners to refresh their kitchens with modern upgrades that improve usability and style but avoid the more expensive and disruptive renovations associated with larger-scale projects. Similarly, primary bathroom remodels saw a significant 13% jump in spending during the same period. These statistics underscore the growing interest in remodels that enhance day-to-day living and overall comfort, with homeowners seeking practical yet stylish changes that don’t break the bank or require months of construction.
This shift in spending priorities is also indicative of a broader change in homeowners’ mindsets. In an environment where new home inventory remains limited and interest rates remain elevated, many are opting to “fix and stay” rather than relocate. The “fix-and-stay” mindset is becoming more prevalent as homeowners realize that, given the current real estate climate, it may make more sense to invest in improving their existing homes than to navigate a competitive housing market or take on the financial burden of a new home purchase. With a focus on making the most of their current spaces, these homeowners are choosing renovations that improve comfort, efficiency, and long-term livability without the stresses associated with major home buying or expansion.
Service contractors, meanwhile, are reporting strong demand for system upgrades, with many homeowners investing in projects that enhance the overall energy efficiency and comfort of their homes. HVAC system replacements, insulation upgrades, and the installation of smart-home devices are just a few examples of how homeowners are modernizing their living spaces without the need for disruptive expansions. These improvements not only increase comfort but also serve as proactive measures to manage rising energy costs, making homes more energy-efficient and sustainable in the long run. The appeal of these projects lies in their ability to improve a home’s functionality while avoiding the complex logistics and expense of larger remodels.
Despite the pause in big-ticket remodeling, the home improvement market remains elevated compared to pre-pandemic norms, and experts predict that it will remain strong for the foreseeable future. This steady demand for home upgrades reflects a deep cultural shift in how homeowners view their properties. In the past, many homeowners focused on buying and selling as a means of achieving better living spaces. However, the combination of rising home prices, limited inventory, and higher interest rates has shifted the focus to improving what one already owns. This “homefront” approach to housing—prioritizing lifestyle-driven improvements—continues to drive investment in home remodeling, as people seek to create more comfortable, functional, and personalized spaces.
Moreover, the rise in home improvement spending is not just a reflection of individual homeowner desires but is indicative of larger shifts in the housing market. With fewer people opting to buy new homes, the remodeling market has become an increasingly attractive option for those who want to enhance their living spaces without the expense and uncertainty of moving. While the pandemic-era surge in home remodeling projects may have peaked, the current period of moderate growth suggests that many homeowners are still committed to making their homes the best they can be.
Looking ahead, while the growth in home improvement spending may not be as explosive as it was during the height of the pandemic, it still suggests a robust market. The combination of more affordable, smaller-scale upgrades, along with a continued focus on energy efficiency and technology, ensures that homeowners are investing in ways that improve both the immediate enjoyment of their spaces and their long-term value. Whether through new kitchen finishes, more efficient heating and cooling systems, or smart home integrations, these investments reflect a broader shift toward creating homes that are not only more functional but also more attuned to the evolving needs of modern living.
In conclusion, although large-scale home remodels have slowed somewhat in the face of economic pressures, homeowner spending on remodeling remains steady and resilient. Many are shifting their focus to smaller, more targeted improvements that offer substantial value without the costs and disruptions of full-scale renovations. As the housing market continues to face challenges, the “fix-and-stay” approach to homeownership remains a viable and popular option for many, ensuring that the remodeling market will continue to thrive into late 2025 and beyond.
