While remodeling activity will close 2023 on a stronger note than expected, a moderate downturn is still expected for the sector in 2024 and 2025, according to Zonda.

Zonda’s Residential Remodeling Index (RRI)—a measure of overall pro-worthy remodeling and replacement levels—increased 2.4% year-over-year and 0.2% sequentially to 169.8 in the third quarter of 2023. The reading is a 19-year high for the RRI and means remodeling activity is 69.8% higher than in 2007, the baseline year of the series. The third quarter reading beat Zonda’s August forecast by three points.

When averaged on an annual basis, the RRI will increase 3.3% for 2023 before decreasing 0.5% in 2024 and 1.8% in 2025. Zonda projects annual growth will return to the sector in 2026, when activity is forecast to increase by 0.5%.

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