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Strong growth in home improvement and maintenance expenditures is expected to continue over the coming year, according to the Leading Indicator of Remodeling Activity (LIRA) released by the Remodeling Future Program at the Joint Center for Housing Studies of Harvard University.

The LIRA projects year-over-year gains in annual improvement and repair spending will reach 9 percent in the fourth quarter and maintain that pace into 2022.

“Residential remodeling continues to benefit from a strong housing market with elevated home construction and sales activity and immense house price appreciation in markets across the country,” said Carlos Martín, project director of the Remodeling Futures Program at the Center. “The rapid expansion of owners’ equity is likely to fuel demand for more and larger remodeling projects into next year.”

“With these tailwinds, annual improvement and repair expenditures by homeowners could reach $400 billion by the third quarter of 2022,” said Abbe Will, Associate Project Director of the Remodeling Futures Program. “Yet there are several headwinds that could still taper the expected growth in remodeling spending including the rising costs of labor and building materials, as well as increasing interest rates.”