Homeowner spending on remodeling is expected to continue dipping in the first three quarters of 2009, according to estimates released today by the Cambridge, Mass.-based Joint Center for Housing Studies at Harvard University.
The Joint Center’s Leading Indicator of Remodeling Activity--which factors in variables such as existing-home sales, interest rates, new-home starts, and the NAHB’s Remodeling Market Index--finds that homeowner improvement spending fell in 2008 by 11.9%, based on a moving four-quarter rate of change. The Joint Center estimates that owner-occupied households spent $122.6 billion on remodeling and repair last year, compared to $139.1 billion in 2007.
That spending will shrink at least through the fall of this year, during which the Joint Center projects quarterly decreases of 10%, 12% and 12.1% for the first, second and third quarters, respectively.
Those projections correspond with results of a recent survey of 5,000 U.S. homeowners, nearly one-third of whom--32%--answered “probably not” to whether they’d engage in remodeling this year. That was four times the number of respondents who gave the same answer to that question in 2007, according to remodelerormove.com, the Web site that conducted the survey and posted the latest results in its spring 2009 Remodeling Sentiment Report.
The economy, the cost of remodeling, and finding a trustworthy contractor were concerns for a greater number of homeowners than they were for past respondents. However, it’s not all bad news:
• The spring 2009 survey found that 52% of those homeowners polled were “excited” about remodeling their houses, and 65% within this group planned to hire a general contractor. Another 65% planned to do remodeling work themselves.
• More than half of those polled said they planned to remodel a kitchen. Fifty-five percent wants to add a bathroom, and another 45% plan to remodel an existing bathroom. More than one-third of respondents said they would add one or more bedrooms or a den. And nearly one-fifth plans to enlarge or add a garage.
John Caulfield is senior editor at BUILDER magazine.
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