While more homeowners are wanting to stay in their homes and renovate rather than buy a new home, the housing cycle's current downward trend is dragging down remodeling activity.
According to the latest reading of Joint Center for Housing Studies of Harvard University's Leading Indicator of Remodeling Activity (LIRA), spending is expected to decrease to a 6.6 percent annual gain in fall 2019, or $350 billion overall. This fall, remodeling spending hit 7.7 percent, a decade high. Realtor.com reports that even though spending will still be at a healthy pace, this new data reflects a turning point, "it signals that a major work-around Americans had devised for dealing with an uncooperative housing market can’t overcome its inertia."
As the Joint Center’s director, Chris Herbert, explained, frustrated would-be house hunters are just one of the drivers of the surge in remodeling spending. Actual house hunters are another — and if their numbers thin even more, so will their spending. “Low for-sale inventories are presenting a headwind because home sales tend to spur investments in remodeling and repair both before a sale and in the years following,” Herbert said.
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