Continued weakness in home remodeling expected into 2012

Home improvement spending will remain weak through the first half of 2012 thanks to a down economy and housing market, according to the Leading Indicator of Remodeling Activity (LIRA) released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA pointed to a modest decline in annual homeowner improvement spending over the next several quarters.

“After pulling through the worst of the downturn in home improvement spending, we appear to be entering another period of softening,” says Eric Belsky, managing director of the Joint Center. “The ups and downs in the economy are being reflected in home improvement activity.”

“Absent a more sustained upturn in the broader housing market, particularly in the sales of existing homes, there’s not much to propel growth in home improvement spending,” said Kermit Baker, director of the Remodeling Futures Program at the Joint Center. “Homeowners are continuing to undertake smaller jobs, but are still nervous about larger discretionary projects." 

Designed to estimate national homeowner spending on improvements for the current quarter and subsequent three quarters, the LIRA 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.

The Remodeling Futures Program, initiated by the Joint Center for Housing Studies in 1995, is a comprehensive study of the factors influencing the growth and changing characteristics of housing renovation and repair activity in the United States. It seeks to produce a better understanding of the home improvement industry and its relationship to the broader residential construction industry.