As the broader housing market continues its sluggish recovery, growth in home improvement spending is also expected to soften throughout the coming year, according to a quarterly forecast by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
The forecast projects annual growth in home improvement spending will decelerate from 6.3 percent in the first quarter of 2015 to 1.6 percent by the third quarter.
“Due in part to weakening home sales last year, growth in remodeling spending is expected to deflate somewhat in 2015,” managing director Chris Herbert said in a statement. “Homeownership rates continue to slide as lending remains tight and first-time homebuyers are not yet returning to the market.”
“Although contractor sentiment has cooled in recent quarters, it remains favorable overall,” research analyst Abbe Will added. “House price gains are moderating, but still strong and home sales appear to be turning a corner now, all of which bodes well for continued, if more moderate, home improvement gains for 2015.”