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US home remodelling spending set to accelerate
An improving housing market and record low interest rates are driving projections of strong gains in home improvement activity through the end of the year and into the first half of 2013, according to the Leading Indicator of Remodeling Activity (LIRA) released yesterday by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
The LIRA suggests that the seeds for what appears to be a very robust remodelling recovery have been planted, with annual homeowner improvement spending expected to reach double-digit growth in the first half of 2013.
"After a bump in home improvement activity during the mild winter, there was a bit of a pause this Summer," says Eric S. Belsky, managing director of the Joint Center. "However, the LIRA is projecting an acceleration in market activity beginning this quarter, and strengthening as we move into the new year.
Ads Kermit Baker, director of the Remodeling Futures Program at the Joint Center:
"Strong growth in sales of existing homes and housing starts, coupled with historically low financing costs, have typically been associated with an upturn in home remodelling activity some months later.
"While the housing market has faced some unique challenges in recent years, this combination is expected to produce a favourable outlook for home improvement spending over the coming months."
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 remodelling activity and is intended to help identify future turning points in the business cycle of the home improvement industry.
The next LIRA release date is 17th January, 2013.
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19th October 2012