Harvard forecasts slower home improvement spending growth through 2026
Harvard’s latest remodeling forecast still points to spending above $500 billion, but growth slows to 1.6% by late 2026 as buyers favor repairs over big projects.
A slower remodeling market does not mean empty aisles at Home Depot. It means more customers reaching for patch, paint, flooring repair, replacement parts and other basics for aging homes, while bigger discretionary projects cool and shoppers become more price-conscious.
Harvard’s Joint Center for Housing Studies revised its Leading Indicator of Remodeling Activity on April 15 and said annual spending on improvements and maintenance to owner-occupied homes would keep growing through 2026, but at a gentler pace. The center projected year-over-year growth of 2.1% in the middle of the year, easing to 1.6% by the end of 2026, with total homeowner spending reaching $518 billion. Its Remodeling Futures Program says the indicator is a short-term outlook for the current quarter and the next four quarters, and the center says U.S. home improvement spending now tops $600 billion a year.
The change matters because Harvard had been a little more optimistic just six months earlier. On Oct. 16, 2025, the center expected remodeling growth to run at 2.4% in early 2026 and 1.9% in the third quarter, with total homeowner spending reaching $524 billion in early 2026. In July 2025, it was more cautious still, projecting just 1.2% growth by the second quarter of 2026. The latest revision suggests the market is still expanding, but the pace is softer than Harvard thought last fall.
For store teams, that points to a familiar Home Depot pattern: more repair-driven traffic, more questions about durability, and more customers asking how to stretch a project over time. That favors associates who can quickly steer shoppers toward the right fix, especially in departments tied to maintenance and replacement rather than full remodels. The outlook also suggests seasonal demand may be less about big-ticket transformations and more about steady upkeep as homeowners keep patching and refreshing what they already own.
Home Depot’s own messaging lines up with that read. In its Dec. 9, 2025 investor update, the company laid out a preliminary fiscal 2026 base case calling for comparable sales growth of flat to 2%, total sales growth of 2.5% to 4.5%, and diluted earnings per share growth of flat to 4%. It also outlined a recovery case with total sales growth of 5% to 6%, comparable sales growth of 4% to 5%, and mid-to-high-single-digit EPS growth. Its 2025 annual report said knowledgeable associates and on-shelf availability are critical to the store experience, and that the chain serves both DIY and professional customers.
That split was visible in recent results. Reuters-reported coverage of Home Depot’s February 2026 quarter said same-store sales rose 0.4%, helped by contractors and smaller repairs even as the housing market stayed soft. The practical takeaway for 2026 is clear: slower growth still means spending, but the customers walking in are likely to be more selective, more value-driven and more focused on repairs that keep a home moving rather than a renovation that changes everything.
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