After several quarters of slackening growth, home improvement spending is projected to pick up the pace in 2016, according to the recent Leading Indicator of Remodeling Activity report from the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
The LIRA projects annual spending growth for home improvements will accelerate from 2.4 percent last quarter to 6.8 percent in the second quarter of 2016.
“Home improvement spending continues to benefit from the last years’ upswing in housing market conditions including new construction, price gains, and sales,” center managing director Chris Herbert said in a statement. “Strengthening housing market conditions are encouraging owners to invest in more discretionary home improvements, such as kitchen and bath remodeling and room additions, in addition to the necessary replacements of worn components such as roofing and siding.”
“Although we expect remodeling activity to strengthen through the first half of 2016, further gains could be tempered,” added Abbe Will, a research analyst in the Remodeling Futures Program. “Current slowdowns in shipments of building materials and remodeling contractor employment trends, as well as restrictive consumer lending environments, are lowering remodeler sentiment and could keep spending gains in the mid-single digit range moving forward.”