CAMBRIDGE, MA – Get ready for grabbing more business from home remodeling projects.
According to the Joint Center for Housing Studies of Harvard University, homeowner improvement spending is likely to reach a cyclical bottom in the current quarter and steadily increase through 2010 as gauged by the Leading Indicator of Remodeling Activity (LIRA).
The LIRA projects annual declines in home improvement spending will ease from the current rate of 12.0% to 3.1% in the third quarter of 2010. “It appears we may be near the bottom of the current remodeling cycle,” said Nicolas Retsinas, director of the Joint Center for Housing Studies. “With signs of stabilization in the national economy, homeowners are once again planning home improvement projects.”
Remodeling industry fundamentals are generally beginning to turn positive. “Sales of existing homes are on the rise and home price declines are moderating in most markets across the country,” said Kermit Baker, director of the Remodeling Futures Program at the Joint Center for Housing Studies. “Financing costs are also favorable, although credit availability remains tight for many households.”
The LIRA is designed to estimate national homeowner spending on improvements for the current quarter and subsequent three quarters. The indicator, measured as an annual rate-of-change of its components, provides a short-term outlook of homeowner remodeling activity and is intended to help identify future turning points in the business cycle of the home improvement industry.
Have something to say? Share your thoughts with us in the comments below.