Market Conditions Favor Continued Growth

Homeowner expenditures on remodeling rose 6.6% during the four quarters ending Sept. 30 to an annualized rate of $125.2 billion, according to the latest Remodeling Activity Indicator report from the Joint Center for Housing Studies at Harvard University (www.jchs.harvard.edu). "With spending accelerating, the prospects are improving for remodeling in the coming year," says Kermit Baker, director of the JCHS Remodeling Futures Program.

• The Home Improvement Research Institute (www.hiri.org) predicts that sales of home improvement products will grow from 2005 to '08 at an annual average of 4.7%, greater than the growth rate forecast for overall retail sales.
  
  
• Corporate finance analyst Natexis Bleichroeder says two main factors are driving the home improvement market: 1) home resales, which through September were 9.7% ahead of last year's record pace, and 2) mortgage refinancing and home equity borrowing for remodeling projects.
  
  
• From its fall 2003 survey, the American Affluence Research Center (www.affluenceresearch.org) reports that 21% of respondents (the sample comes from the wealthiest 10% of U.S. households, those with minimum net worth of $750,000) plan to have major remodeling done on one or more homes during the next 12 months.