The U.S. Commerce Department reports that expenditures for improvements to, and repairs on, residential properties during the second quarter of 2000 were at a seasonally adjusted annual rate of $148.0 billion. This pegged AprilùJune 2000 spending at a level 5.7% below the first-quarter 2000 paceùbut a solid 15.2% above the annualized spending estimate for the second quarter of 1999. Regrettably, this is the most current information available from the government; we don't have any official numbers about what happened in the market over the second half of last year.
The seasonally adjusted annualized spending total was lower during the second quarter of 2000 than in the first quarter of the year for two of the three subsectors of the market. The estimated annualized spending pace for the additions/alterations sub-sector of the market was $67.8 billion, down 9.0% from the JanuaryùMarch level and almost 19% below the average recorded during the second half of 1999.
Spending in the major replacements category, though, rose to a record-high level during the AprilùJune period of 2000. At a seasonally adjusted annualized rate of $36.8 billion, secondquarter spending improved 4.5% from the first-quarter 2000 pace and was almost 30% higher than during the final six months of 1999.
Spending for household maintenance and repairs, on the other hand, slowed to its weakest annualized pace in a year during the second quarter of 2000. Consumers spent an estimated 8.3% less ($43.3 billion, on an annualized basis) during AprilùJune 2000 than they did over the first quarter of the year on the maintenance and upkeep of existing residential properties.
The less comprehensive (but much more timely) Remodeling Activity Indicator (RAI) developed by Harvard University's Joint Center for Housing Studies (JCHS) is another market measure worthy of attentionùalthough it doesn't shed any light on how much money consumers are spending on home maintenance and repair. The latest JCHS reportùwhich brings us through the third quarter of 2000ùestimates that total remodeling expenditures by homeowners were at an annualized level of $99.0 billion.
The report showed total improvement spending growing at a 3.8% annual rate, down from the 4.1% annualized gain regis- tered in the previous quarter, but a trend much better than the declines recorded over the first three quarters of 1999. Annualized improvement spending reached $101.5 billion during the first quarter of 2000ùonly slightly below the record-high of $101.8 billion recorded during the second-quar ter of 1998ùbut averaged 3.3% less than this over the middle two quarters of 2000.