With some door and window dealers reporting a modest slowdown amid summer months and vacations, one indicator of demand for remodeling indicates that the remainder of the year could bring steep increases. The same report suggests that sales will remain on an upswing through the middle of next year.

The latest edition of the Leading Indicator of Remodeling Activity (LIRA), produced by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, projects annual growth in home renovation and repair expenditures to reach 8.6% by the second quarter of 2022. The change follows a year of turbulence among economic indicators, researchers suggest, with numerous measures showing “extreme percent changes from the pandemic-induced lows.” To smooth out the volatility found in most data, the group used two leading model inputs for its latest indicator, including residential remodeling permits and single-family housing starts. Past methods for modeling would have shown exacerbated growth rates, analysts say.

“Home remodeling will likely grow at a faster pace given the ongoing strength of home sales, house price appreciation, and new residential construction activity,” says Chris Herbert, managing director for Harvard’s Joint Center for Housing Studies. “A significant rise in permits for home improvements also indicates that owners are continuing to invest in bigger discretionary and replacement projects.”

Higher gains in retail sales of building materials also suggest the remodeling market remains in an upswing partly due to DIY activity, adds Abbe Will, associate project director in the Center’s Remodeling Futures Program. “By the middle of next year, annual remodeling expenditures to owner-occupied homes are expected to surpass $380 billion,” Will says.

LIRA provides a short-term outlook of national home improvement and repair spending to owner-occupied homes, measured as an annual rate-of-change, to project spending for the current and subsequent four quarters.