Interior Design Services NAICS 541410

Apr 23, 2026 - Remodeling Spending to Slow Early Next Year

• Home remodeling spending growth is expected to slow significantly early in 2027, according to the Leading Indicator of Remodeling Activity (LIRA) report released in May by the Joint Center for Housing Studies at Harvard. Homeowner spending on improvements and repairs is expected to increase 1.8% to $516 billion in the second quarter of 2026, compared to Q2 2025. In the third quarter of 2026, remodeling spending will trend slightly upward to $518 billion, up 2.4% from Q3 2025. Spending will then remain flat at $518 billion in Q4 2026, up 1.8% from Q4 2025. In the first quarter of 2027, year-over-year spending is forecast to rise just 0.5% to $523 billion. Remodeling permitting and building product sales have remained flat recently, but homeowners are expected to maintain spending near 2025 levels. Remodeling spending is likely to remain subdued, barring a turnaround in the construction sector.
• CNBC reports Home Depot beat Wall Street expectations and reaffirmed full-year guidance as homeowner customers remained resilient despite higher gas prices and weak consumer confidence. Fiscal first-quarter revenue rose about 5% year over year to $41.8 billion, while net income fell to $3.29 billion, down 4% year over year. Executives said customers continue to spend on smaller projects but are deferring larger renovations. Home center retailers continue to face headwinds related to a soft housing market, including high mortgage rates, lower housing turnover, and economic uncertainty. The company is investing in its professional customer segment through acquisitions to capture more share in a large, fragmented market, while maintaining expectations for modest sales growth this year. Consumer spending at home centers is a demand indicator for interior design services.

• The aging of the US housing stock is likely to support continued remodeling and design spending. The median age of US homes has reached a record 44 years, driving up maintenance and modernization costs as aging properties require major repairs, according to Harvard researchers and The Wall Street Journal. Much of the housing stock dates to building booms in the 1920s, postwar years, and 1970s, and has not been replaced by new construction. Experts now recommend homeowners budget 2% to 3% of a home’s value annually for upkeep, rather than the traditional 1%. Aging homes also raise insurance risks, limit resale options, and increase financial strain, especially as nearly half of renovation spending now goes to essential replacements.
• A recent survey by Block, a remodeling planning tech firm, shows homeowners are approaching remodeling with caution as economic pressures reshape industry trends: 53% of respondents budget $25K or less, and 70% rely on savings, reinforcing a shift toward smaller, phased projects rather than full-home renovations. Bathrooms (47%), kitchens (39%), and flooring (35%) dominate project types, reflecting a focus on essential, functional upgrades over resale value. Cost volatility remains a key constraint: 53% of those surveyed cite rising material and labor prices, 33% report reduced budgets, and 52% of those making trade-offs plan to DIY portions of the work. Notably, 30% identify finding a trustworthy contractor as the top barrier, surpassing cost concerns, signaling increased demand for transparency and vetted professionals.