Remodeling spending could see downturn in 2020
Remodeling and repair spending could see a downturn in 2020, according to the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
Annual gains in homeowner spending for improvements and repairs are set to give out by the second half of next year, according to the Leading Indicator of Remodeling Activity (LIRA). The LIRA projects that annual home improvement and maintenance expenditures will post a modest decline of 0.3% through the third quarter of 2020.
“Continued weakness in existing home sales and new construction will lead to sluggish remodeling activity next year,” said Chris Herbert, managing director of the Joint Center for Housing Studies. “Slowdowns in other key indicators of improvement spending—project permitting, sales of building materials, and home prices—also suggest the remodeling market may be reaching a turning point.”
“At $325 billion, owner improvement and repair spending in the coming year is expected to essentially remain flat compared to market spending of $326 billion over the past four quarters,” says Abbe Will, associate project manager in the Remodeling Futures Program at the Center. “However, today’s low mortgage interest rates may help counter some of these headwinds, which could buoy home improvement expenditure over the coming year.”
LIRA provides a short-term outlook of national home improvement and repair spending to owner-occupied homes. The indicator, measured as an annual rate-of-change of its components, is designed to project the annual rate of change in spending for the current quarter and subsequent four quarters, and is intended to help identify future turning points in the business cycle of the home improvement and repair industry.
In a recent presentation at the 2019 ProDealer Industry Summit, real estate expert John Burns said he expects total remodeling spending to grow 1.8% next year with small repair projects, including plumbing, to grow as much as 5% in 2020.
Annual gains in homeowner spending for improvements and repairs are set to give out by the second half of next year, according to the Leading Indicator of Remodeling Activity (LIRA). The LIRA projects that annual home improvement and maintenance expenditures will post a modest decline of 0.3% through the third quarter of 2020.
“Continued weakness in existing home sales and new construction will lead to sluggish remodeling activity next year,” said Chris Herbert, managing director of the Joint Center for Housing Studies. “Slowdowns in other key indicators of improvement spending—project permitting, sales of building materials, and home prices—also suggest the remodeling market may be reaching a turning point.”
“At $325 billion, owner improvement and repair spending in the coming year is expected to essentially remain flat compared to market spending of $326 billion over the past four quarters,” says Abbe Will, associate project manager in the Remodeling Futures Program at the Center. “However, today’s low mortgage interest rates may help counter some of these headwinds, which could buoy home improvement expenditure over the coming year.”LIRA provides a short-term outlook of national home improvement and repair spending to owner-occupied homes. The indicator, measured as an annual rate-of-change of its components, is designed to project the annual rate of change in spending for the current quarter and subsequent four quarters, and is intended to help identify future turning points in the business cycle of the home improvement and repair industry.
In a recent presentation at the 2019 ProDealer Industry Summit, real estate expert John Burns said he expects total remodeling spending to grow 1.8% next year with small repair projects, including plumbing, to grow as much as 5% in 2020.