After two years of bouncing around a bottom, remodeling activity is expected to pick up later this year, according to the Leading Indicator of Remodeling Activity (LIRA) released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University . Stronger pending home sales and continuing low interest rates are contributing to the rise. The LIRA projects annual spending will see healthy growth in 2012, ending the year up 5.9 percent.
“Hopefully, we’re finally moving beyond simple volatility in the home improvement spending numbers to a period of sustained growth,” says Eric S. Belsky, managing director of the Joint Center. “The recent upturn we’ve seen in home sales should translate into more remodeling activity later this year.”
“Unusually mild weather this past winter in many parts of the country accelerated the pace of home building and home improvement activity,” says Kermit Baker, director of the Remodeling Futures Program at the Joint Center. “This may produce a brief pause in remodeling activity this quarter, but then a strengthening economy should provide a foundation for continued growth moving forward. ”
The LIRA is designed to estimate national homeowner spending on improvements for the current quarter and subsequent three quarters. The indicator, measured as an annual rate-of-change of its components, provides a short-term outlook of homeowner remodeling activity and is intended to help identify future turning points in the business cycle of the home improvement industry.