Remodeling Forecast: Still Gloomy

CAMBRIDGE, Mass. – Reductions in the amount spent on high-end home improvement projects will hinder remodeling activity through 2009 according to an ongoing study from the Joint Center for Housing Studies at Harvard University.
For this year, the center’s Leading Indicator of Remodeling Activity (LIRA) points to homeowner improvement spending declining around 12 percent.
“The weak housing market and the national economic recession continue to take their toll on remodeling,” explains Nicolas P. Retsinas, director of the Joint Center for Housing Studies. “It looks increasing unlikely that this industry will recover until consumers have more confidence in the housing market.”
The LIRA projects future trends in homeowner improvement activity, where previously it estimated trends in both owner improvements and maintenance and repairs. It measures and projects only a portion of the U.S. home-improvement market, namely spending by homeowners on property improvements.
Other components of the broader market—spending by homeowners on maintenance and repairs, and spending on improvements, and maintenance and repairs for rental and vacation property—are not included in the LIRA figures.
“Lower financing costs are beginning to stabilize the downturn in existing home sales, as they also are reducing the cost of financing a home improvement project” notes Kermit Baker, director of the Remodeling Futures Program of the Joint Center. “However, they have not been enough to offset rising unemployment and falling consumer confidence and encourage homeowners to undertake major home improvement projects.”
The next release date is July 16, 2009.
Established in 1959, the Joint Center is a collaborative unit affiliated with the Graduate School of Design and the Kennedy School of Government. For more information, go to www.jchs.harvard.edu.