Robust Outlook for Residential Remodeling Through Mid-Year 2019
CAMBRIDGE, MA – Homeowners are expected to increase spending on improvements and repairs at a solid clip over the coming year, according to the Leading Indicator of Remodeling Activity (LIRA) released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects that annual growth in homeowner remodeling expenditure will taper somewhat in the first half of 2019, but still remain around 7 percent.
“A growing economy and stronger job market are boosting owners’ willingness to invest in home improvements,” says Chris Herbert, Managing Director of the Joint Center for Housing Studies. “Rising home values and increased home equity levels are also encouraging more owners to do larger upgrade and replacement projects.”
“Although the projected growth for remodeling activity remains strong, the low inventory of existing homes for sale is holding back even larger gains, since significant remodeling and repair often occurs around the time of a sale,” says Abbe Will, Associate Project Director in the Remodeling Futures Program at the Joint Center. “Even so, annual spending on residential improvements and repairs by homeowners is expected to reach nearly $350 billion by the middle of next year.”
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.
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 October 18, 2018.
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 United States. The Program 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 programs, 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. For more information, please visit www.jchs.harvard.edu.
Contact: Kerry Donahue, (617) 495-7640, [email protected]