According to the Leading Indicator of Remodeling Activity (LIRA), released in October by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, home improvement spending is expected to rise sharply in 2016.
For the second quarter of 2016, four-quarter total spending is anticipated to be $154.5 billion, with a four-quarter moving rate of change projected at 6.8 percent. The rise would be a marked increase from the 2.4 percent growth seen in the third quarter of 2015.
“Home improvement spending continues to benefit from the last years’ upswing in housing market conditions including new construction, price gains, and sales,” said Chris Herbert, managing director of the Joint Center, in a statement. “Strengthening housing market conditions are encouraging owners to invest in more discretionary home improvements, such as kitchen and bath remodeling and room additions, in addition to the necessary replacements of worn components, such as roofing and siding.”
Since reaching a peak of 10.0 percent in the third quarter of 2014, the rate of remodeling spending has tailed off each quarter: 7.7 percent in the fourth quarter of 2014, 6.5 percent in the first quarter of 2015, and 4.3 percent in the second quarter. Spending is trending upward though, as the LIRA is expected to be 3.4 percent in the fourth quarter of 2015 and 4.4 percent in the first quarter of next year.
The LIRA measures and estimates national spending on home improvements over the current quarter and following three quarters. It is released by the Harvard Joint Center three weeks after the end of each quarter. PB