As the economic recovery picks up steam, home improvement spending is projected to increase as homeowners look to improve their homes with smaller improvements rather than trading locations. According to the Leading Indicator of Remodeling Activity (LIRA) released this month by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, home improvement spending will recover and annual spending for remodeling will accelerate with nearly 5% growth for 2010. As home prices start to moderate, home sales begin growing and the employment outlook improving, homeowners will focus on remodeling vs. buying until prices begin to appreciate and unemployment begins to drop.
“The gradual recovery in the broader economy should encourage more remodeling spending by homeowners,” says Nicolas P. Retsinas, director of the Joint Center for Housing Studies. “This year could produce the first annual spending increase for the industry since 2006.”
The Remodeling Futures Program, initiated by the Joint Center for Housing Studies in 1995, is a comprehensive study of the factors influencing the growth and changing characteristics of housing renovation and repair activity in the United States. The Program seeks to produce a better understanding of the home improvement industry and its relationship to the broader residential construction industry.