2022 Remodeling Forecast: A Mostly Sunny Outlook With A Few Threatening Clouds

Trying to predict residential remodeling expenditures in the current environment is a lot like forecasting the weather… things can go from comfortable to unsettled in an instant and vice versa. 

At the end of 2020, predictions for annual growth in 2021 home renovations and maintenance were expected to be in the range of 0.4% to 1.7%, yet the actual numbers at year’s end should be in the range of 8.6% to 9.7%.

Since unexpectedly exceeding expectations has become something of a trend, there’s good reason to be optimistic about new opportunities in 2022. However, there are also some areas of uncertainty that have the potential to put a chill on the results.

On The Bright Side
According to the Leading Indicator of Remodeling Activity (LIRA) from Harvard University, the annual growth of spending on remodeling and maintenance is predicted to reach nearly 9% by mid-2022.

This continues a trend of increased remodeling expenditures by homeowners’ as they adapt changing priorities brought about by the pandemic. Some of the key factors that reinforce this positive view include strong housing market numbers in terms of sales, new construction and value appreciation.

The Leading Indicator of Remodeling Activity outlook for 2022

The Hottest Trends
Many experts anticipate that there will be a number of major remodeling trends for 2022. At the top of the list, there will be more demand for versatile, multi-functional mudrooms with waterproof, easy-care luxury vinyl tile floors that work for any combination of pantry storage, organizing (boots, shoes, backpacks, keys, etc.), laundry, charging tools, and even a pet washing station.

Other trends will include more tailored outdoor living spaces, increased glass areas to help bring light and nature into the home, added flexibility in home office design to accommodate a variety of functions, and accessory dwelling units. Of course, how big these trends actually become depends on whether the outlook remains bright or gets clouded over.

A Darker View
On the other end of the spectrum, the Residential Remodeling Index presents a somewhat dimmer outlook in forecasting a modest decrease of less than 2% in remodeling expenditures for 2022 after a nearly 10% gain in 2021. This view anticipates that rising mortgage rates will have a somewhat chilling effect on the housing market for 2022 before things rebound in 2023 and 2024.

Residential Remodeling Index outlook for 2021

Shadow Of Uncertainties
In addition to rising mortgage rates, there are two other clouds looming with the potential to cast a shadow over remodeling projects for 2022 – the ongoing issues of shortages in materials and labor.

Depending on how extensive and how prolonged these shortages may turn out to be, they could significantly increase the costs and delay the timing of a number of projects. This, in turn, could lead to fewer and smaller projects. At the moment, however, there’s no way to accurately predict the frequency or severity of these shortages.

Plan Ahead Today
No matter which direction the market takes, be prepared to take advantage of remodeling opportunities by connecting with ProSource Wholesale® either online or by visiting your local showroom.

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List Price (USD): $7.81 SF

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