Remodeling Gains Expected to Continue into 2014
General strengthening in the housing market over the past 18 months is translating into increased spending on home improvements, according to the Leading Indicator of Remodeling Activity released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. Remodeling contractors have reported improving market conditions for the past four quarters, and are seeing strength in future market indicators. Spending trends have been on a solid upward slope, with indicators projecting continued strengthening of the market through the end of this year and into the first quarter of 2014.
“Homeowners are more comfortable investing in their homes right now,” says Eric S. Belsky, Joint Center managing director. “Consumer confidence scores are back to pre-recession levels, and since recent homebuyers are traditionally the most active in the home improvement market, the growth in sales of existing homes is providing more opportunities for these improvement projects.”
“Yet, with housing starts leveling off in the second quarter and financing costs beginning to edge up, we may be seeing the beginning of more measured growth in the residential markets,” cautions Kermit Baker, the Remodeling Futures Program director. “Given normal timing patterns, this suggests that the pace of growth for home improvement spending should begin to moderate as we move into 2014.”
Note: On July 16, the Harvard Joint Center issued a statement saying it would not release its quarterly LIRA projections due to unusually volatile revisions to home improvement spending data collected by the U.S. Census Bureau. On July 18, 2013, Census announced corrections to their annual revisions; because of these corrections, the Joint Center for Housing Studies is now releasing its LIRA for the second quarter of 2013.