Report: Remodeling Spending to Grow into 2018October 24th, 2017 by Editor
Spending on residential improvements and repairs is expected to accelerate through the third quarter of 2018, according to the Leading Indicator of Remodeling Activity (LIRA) released last week by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
According to the LIRA, annual gains in home renovation and repair spending will rise from 6.3 percent in the fourth quarter of 2017 to 7.7 percent by the third quarter of 2018.
“Recent strengthening of the U.S. economy, tight for-sale housing inventories and healthy home equity gains are all working to boost home improvement activity,” says Chris Herbert, managing director of the Joint Center for Housing Studies. “Over the coming year, owners are projected to spend in excess of $330 billion on home upgrades and replacements, as well as routine maintenance.”
More growth could be on the horizon as the southeastern U.S. and Puerto Rico recover from hurricanes Irma, Harvey and Maria.
“While it’s too early for our LIRA model to capture the effects of recent hurricanes and other natural disasters experienced around the country, there is certainly potential for even stronger growth in remodeling next year as major reconstruction and repairs get underway in affected regions,” says Abbe Will, Research Associate in the Remodeling Futures Program at the Joint Center.
The Leading Indicator of Remodeling Activity (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. Originally developed in 2007, the LIRA was re-benchmarked in April 2016 to a broader market measure based on the biennial American Housing Survey.