Recent Remodeling Market Forecasts Indicate Opportunity for Showrooms

Two months ago, the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University offered cautious optimism with its estimate that annual expenditures for home improvements will grow “at a mild pace throughout 2025.”

That assessment was provided by the Leading Indicator of Remodeling Activity (LIRA), which is released periodically by the program. In January, the LIRA projected that year-over-year spending for home renovation and repair will increase by 1.2 percent in 2025. That isn’t a fabulous percentage, but it’s still in the right direction. (The next LIRA release date is April 17.)

“A solid labor market, rising home values, and continued improvement in existing home sales are supporting greater activity in home remodeling and repair,” said Carlos Martín, director of the Remodeling Futures Program at the Center. “Upward trending retail sales of building materials and steady permitting for remodeling indicate that homeowners are slowly, but surely, expanding the pace and scope of projects compared to the last couple years.” 

The January LIRA release incorporated new benchmark data from the American Housing Survey that revised up the overall market size. “In the wake of the pandemic, strong gains in homeownership, record high home values and equity, and a healthy economy combined to lift improvement and repair spending to unprecedented heights in 2022 and 2023, growing 25.3 percent over these two years. The growth in actual spending was 7.5 percentage points higher than the gains originally estimated by the LIRA models over this period,” added Abbe Will, associate director of the Remodeling Futures Program. “While expenditures are expected to grow only modestly this year, we’ve increased our projection for the remodeling market size in 2025 by $30 billion, or 6.4 percent, to $509 billion.”

Several weeks ago, Home Depot released its Fourth Quarter and Fiscal 2024 Results, which saw an increase of 14.1% from the fourth quarter of fiscal 2023. Comparable sales for the fourth quarter of fiscal 2024 increased 0.8%, and comparable sales in the U.S. increased 1.3%.

Under Fiscal 2025 Guidance, Home Depot estimated a total sales growth of approximately 2.8%, noting that 2025 is a 52-week year compared to fiscal 2024, which was a 53-week year. (Comparable sales growth of approximately 1.0% is estimated for the comparable 52-week period.)

Lowe’s Companies’ Fourth Quarter 2024 Sales and Earnings Results noted comparable sales for the quarter increased 0.2%, driven by high single-digit Pro and online comparable sales, strong holiday performance, and rebuilding efforts in the wake of recent hurricanes, partially offset by continued near-term pressure in DIY discretionary spending.

“Our results this quarter were once again better-than-expected, as we continue to gain traction with our Total Home strategic initiatives,” stated Marvin R. Ellison, Lowe’s chairman, president and CEO. “We remain confident in the long-term strength of the home improvement industry, and we are equally confident in our strategy to capitalize on the expected recovery.” 

With buying a home still out of reach for many Americans in 2025 due to high interest rates and short supply, remodeling their current residence to either increase their enjoyment of the home or bolster its potential resale value is a project they are willing to invest in.

Rather than battling on price, lighting showrooms have several advantages they should promote. Naturally, there is a showroom’s vastly larger product selection. Offering a fair amount to choose from in several price points increases the odds of homeowners finding more products that appeal to them — and often, they are agreeable to paying a little more for styles they love rather than “settle” for.   

Since lighting showroom personnel are also more highly trained in lighting technology and design than staff at a home center, position your store marketing to highlight the benefits that working with a lighting expert provides: saving time on product selection, more tailored solutions that fit their specific budget, and professional guidance every step of the way.    

In areas of the country where homebuilding activity has remained flat, courting homeowners who are looking to remodel – as well as partnering with home remodelers and contractors as their local lighting pro – makes good business sense.