It’s not getting worse but an analyst report sees housing being soft for the immediate future.
“We anticipate ongoing pressure ahead, as interest rates remain somewhat elevated—restrictive monetary policy due to higher-than-expected inflation—and continue to weigh on affordability and borrowing, resulting in deferred home investment.” That’s the bottom line forecast from Telsey Advisory Group, the Wall Street analyst firm in its latest report.
TAG said that existing home sales, one of the largest barometers of the health of the home improvement market, dipped below 4 million annualized units in March 2026 and have been negative, on a year-over-year basis, for four of the last five months.
Home prices, which TAG said is another leading driver of home improvement spending, continued to grow versus last year but at a decelerating pace. Even with slightly lower mortgage rates it “appears to continue suppressing remodeling activity, which is projected to see slower growth in the second half of 2026.”
However, TAG forecast some positive signs down the road. “Pent-up demand is building in the housing industry, given deferred projects and an aging housing stock.”
TAG’s housing scorecard has ten data points that it believes drive home spending. They range from housing-specific measures, like existing home sales and home prices, to broader consumer metrics, like employment. “Of the ten metrics, we view two as positive (value of construction put in place, housing formation), three as mixed (remodeling, home prices, and employment), and five as negative (private fixed residential investment, 30-year fixed mortgage rate, existing home sales, new construction and consumer confidence).”
