Home improvement spending will recover this year, according to the Leading Indicator of Remodeling Activity (LIRA), which was released April 15 by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA suggests annual spending will accelerate, with nearly 5 percent growth in 2010.
"The gradual recovery in the broader economy should encourage more remodeling spending by homeowners," says Nicolas P. Retsinas, director of the Joint Center for Housing Studies. "This year could produce the first annual spending increase for the industry since 2006."
Favorable market conditions support the projected increase in remodeling activity.
"With house prices showing modest gains in most markets and the employment outlook beginning to stabilize, owners are likely to refocus attention on home improvements," says Kermit Baker, director of the Remodeling Futures Program at the Joint Center for Housing Studies. "Home sales are trending up, which shows growing confidence in the housing market."
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.
The LIRA is released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard in the third week after each quarter's closing. The next LIRA release date is July 15.
For information, visit www.jchs.harvard.edu.