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 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 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,” says Chris Herbert, Managing Director of the Joint Center. “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,” says Abbe Will, a research analyst in the Remodeling Futures Program at the Joint Center. “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.”
On Thursday, January 29, the Joint Center for Housing Studies will release its latest biennial report on the remodeling industry, Improving America’s Housing: Emerging Trends in the Remodeling Market. The report identifies the remodeling industry segments that will support further growth in the years ahead. There will be a live webcast release Jan 29 at 12:00 p.m. Eastern. For more information, visit LIRA's website.