The prospect that home sales will accelerate should drive spending on remodeling to achieve its first significant increase in more than a year.
That’s the latest projection by Harvard University’s Joint Center for Housing Studies, which on Thursday released its Leading Indicator of Remodeling Activity (LIRA) for the first quarter of 2012, which includes projections for the following three quarters.
“The recent upturn we’ve seen in home sales should translate into more remodeling activity later this year,” said Eric Belsky, the Joint Center’s managing director. Hopefully, we’re finally moving beyond simple volatility in the home improvement spending numbers to a period of sustained growth.” Kermit Baker, director of the Joint Center’s Remodeling Futures Program, added that a strengthening economy “should provide a foundation for continued growth moving forward.”
The Joint Center estimates that national homeowner spending on remodeling, on a four-quarter moving basis, was up 1.4% to $112.4 billion in the first quarter. By the end of this year, however, the Joint Center estimates that the moving four-quarter total will be up 5.9% to $122.6 billion, which would exceed the estimated spending rates of any three months since at least the first quarter of 2009 (see chart).
John Caulfield is senior editor for Builder magazine.
Learn more about markets featured in this article: Boston, MA.