Wood Window and Door Manufacturers NAICS 321911

May 26, 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.
• Single-family housing starts dropped by 9% month-over-month and decreased 2.4% year-over-year in April, according to the US Census Bureau. The number of building permits issued for single-family, privately-owned housing units fell 2.6% month-over-month and dropped 5.5% year-over-year in April 2026. Homebuilders have faced several headwinds, including tariffs that have increased the cost of key inputs like lumber and cabinets, and labor shortages, according to Reuters. Higher mortgage rates may also be weighing on demand for new single-family homes. The US war with Iran is pushing oil prices higher, along with US Treasury yields. Mortgage rates have moved higher as they are tied to the benchmark 10-year Treasury yield. As of May 21, 2026, the average rate for a 30-year fixed-rate mortgage was 6.51% compared to 5.98% when the war began.

• Multifamily developer confidence was steady in the first quarter of 2026, according to the National Association of Home Builders’ (NAHB) latest Multifamily Market Survey. The Multifamily Production Index (MPI) was unchanged at 44 compared to the first quarter of 2024. The Multifamily Occupancy Index (MOI) decreased by 13 points to 69 over the same period. An MPI or MOI reading of 50 or more indicates that multifamily production or occupancy, respectively, is growing. Multifamily developers’ headwinds include volatility in building materials costs, high interest rates, and regulatory difficulties. While the NAHB expects a slight improvement in multifamily construction this year, the momentum is unlikely to carry into 2027.
• North American construction and engineering spending on residential improvements in 2026 is expected to decline 0.4% after being flat in 2025, according to FMI’s second-quarter 2026 North American Engineering and Construction Outlook. Recent financial reports from Home Depot and Lowe’s noted signs that homeowners are pulling back on big-ticket, discretionary projects. In 2026, activity is increasingly concentrated on essential repairs rather than discretionary upgrades. Aging housing stock, now with a median age of 45 years, continues to support baseline demand for critical systems, including building envelopes. However, elevated mortgage rates and homeowners with a locked-in low rate are limiting home sales, reducing renovation activity tied to moves. Higher borrowing costs and tariffs on materials are further pressuring discretionary spending. Additionally, the sunset of homeowner tax credits for energy-efficiency upgrades at the end of 2025 pulled some demand forward into late 2025. Residential improvement spending is projected to rise 2% in 2027, 4% in 2028, and 5% in 2029 as conditions stabilize and demand gradually shifts back toward larger projects.