Jaime Katz recently bought a townhouse outside of Chicago.
“I need to paint for sure. The entire place is gray — like every wall,” she said.
Katz, who follows home improvement retailers for Morningstar, said this is the kind of stuff people spend money on after they buy a house.
“Everybody puts their own personal touch on their space when they move into it,” to better suit their tastes or because it turns out the place needs a new roof, she said.
More people are expected to put personal touches on their homes, just as Katz has done. Momentum in the housing market — driven, in part, by falling mortgage rates — could boost consumer spending on home improvements in 2026, new research out from Harvard’s Joint Center on Housing Studies finds.
“We think that’s going to help unlock some of the pent-up demand from buyers and get a few of them off the sidelines,” said Rachel Drew with Harvard’s Joint Center for Housing Studies.
The center publishes its Leading Indicator of Remodeling Activity once a quarter, “because really, the remodeling market covers everything that is done to existing housing, which is 99% of our housing stock,” Drew said.
Drew expects the rising cost of building materials will keep a lid on growing demand for home improvements in 2026.
Another thing driving that demand? The ultra-low mortgage rates some buyers locked in during the pandemic.
Per Morningstar’s Jamie Katz, when those homeowners want or need something different out of their space, the math sounds something like this: “A $50,000 addition is going to be so much less” than starting over in this tougher housing market.