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Glimmers of hope for remodelling in the US in 2012
After a slow start, home improvement spending is expected to trend up later this year, according to the Leading Indicator of Remodeling Activity (LIRA) released this week by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. If this momentum continues to build during the second half of the year, remodelling activity is on course to end 2012 on a positive note.
"We're beginning to see some hopeful signs in the economy, and the housing market is finally starting its slow recovery," says Eric S. Belsky, managing director of the Joint Center. "That should prove helpful for home improvement spending as the year progresses."
Kermit Baker, director of the Remodeling Futures Program at the Joint Center, goes further, saying: "Sales of existing homes have been increasing in recent months, offering more opportunities for home improvement projects.
"As lending institutions become less fearful of the real estate sector, financing will become more readily available to owners looking to undertake remodeling."
The Leading Indicator of Remodeling Activity (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 development of the LIRA is detailed in 'Developing a Leading Indicator for the Remodeling Industry' (JCHS Research Note N07-1). In July 2008, the LIRA was re-benchmarked due to changes in the underlying reference series. These changes are explained in 'Addendum to Research Note N07-1: Re-Benchmarking the Leading Indicator of Remodeling Activity' (JCHS Research Note N08-1). The LIRA is released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University in the third week after each quarter's closing. The next LIRA release date is 19th April, 2012.
The Remodeling Futures Program, initiated by the Joint Center for Housing Studies in 1995, is a comprehensive study of the factors influencing the growth and changing characteristics of housing renovation and repair activity in the US. The programme seeks to produce a better understanding of the home improvement industry and its relationship to the broader residential construction industry.
The Harvard Joint Center for Housing Studies advances understanding of housing issues and informs policy. Through its research, education, and public outreach programmes, the Center helps leaders in government, business and the civic sectors make decisions that effectively address the needs of cities and communities. Through graduate and executive courses, as well as fellowships and internship opportunities, the Joint Center also trains and inspires the next generation of housing leaders.
20th January 2012