Harvard study points to anticipated growth in remodeling

The home remodeling market can look forward to a fast-approaching wave of growth, according to a recent study by Harvard University.

The latest "Leading Indicator of Remodeling Activity" (LIRA) released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University found that home remodeling spending is expected to increase by 8.6% by the end of 2016 and then to 9.7% by the first quarter of next year.

“Ongoing gains in home prices and sales are encouraging more homeowners to pursue larger-scale improvement projects this year compared to last with permitted projects climbing at a good pace,” said Chris Herbert, managing director of the Joint Center. “On the strength of these gains, the level of annual spending for remodeling and repairs is expected to reach nearly $325 billion nationally by early next year.”

“Our freshly recalibrated indicator now forecasts a broader segment of the national residential remodeling market that includes both improvement and repair activity to the owner-occupied housing stock,” said Abbe Will, a research analyst in the Remodeling Futures Program at the Joint Center. “With this re-benchmarking, the LIRA now more accurately sizes the remodeling market and continues to anticipate major turning points in the spending cycle.”