Remodeling Spending Expected to Rise

According to the Harvard University Joint Center for Housing Studies' latest reading of the Leading Indicator of Remodeling Activity (LIRA), American homeowners are projected to increase remodeling spending over the next 12 months. 

Chris Herbert, managing director of the JCHS explains that job market strength, rising home values, and greater home equity levels are boosting homeowner willingness to invest in remodeling their homes. Abbe Will, associate project director in the Remodeling Futures Program of JCHS adds, “Although the projected growth for remodeling activity remains strong, the low inventory of existing homes for sale is holding back even larger gains, since significant remodeling and repair often occurs around the time of a sale.” Will anticipates that remodeling expenditure will reach $350 billion by the halfway point of 2019, despite drags on the sector. 

(LIRA) provides a short-term outlook of national home improvement and repair spending to owner-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. Originally developed in 2007, the LIRA was re-benchmarked in April 2016 to a broader market measure based on the biennial American Housing Survey.

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