CAMBRIDGE, Ma. – Strong gains in home renovation and repair spending are expected to continue into next year before tapering, according to the Leading Indicator of Remodeling Activity (LIRA) released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects that annual growth in home improvement and repair expenditures will continue to increase, surpassing eight percent by the second quarter of 2017 before moderating somewhat later in the year.
“Homeowner remodeling activity continues to be encouraged by rising home values and tightening for-sale inventories in many markets across the country,” says Chris Herbert, managing director of the Joint Center. “Yet, a recent slowdown in the expansion of single family homebuilding and existing home sales could pull remodeling growth off its peak by the second half of 2017.”
“Even as remodeling growth trends back down, levels of spending are expected to reach new highs by the third quarter of next year,” says Abbe Will, remodeling research analyst at the Joint Center. “At $327 billion annually, the homeowner improvement and repair market will surpass its previous inflation-adjusted peak from 2006.”
Harvard’s LIRA model provides a short-term outlook of national home improvement and repair spending to owned and occupied homes. The indicator, measured as an annual rate-of-change of its components, is designed to project the annual rate of change in spending for the current quarter and subsequent four quarters, and is intended to help identify future turning points in the business cycle of the home improvement and repair industry.