Momentum Building in Remodeling and Replacement Market
Spending by homeowners on improvement projects is expected to accelerate as the year progresses, according to the Leading Indicator of Remodeling Activity released April 18 by the Joint Center for Housing Studies of Harvard University. On top of the almost 10 percent growth reflected in U.S. Census Bureau figures for 2012, the LIRA projects strong gains in homeowner remodeling spending continuing throughout 2013, with some moderation in the pace of growth toward the end of the year.
“Existing home sales were up almost 9 percent last year, and house prices are increasing in most markets across the country,” says Eric S. Belsky, managing director of the Joint Center. “This has increased the home equity levels for most homeowners, encouraging them to reinvest in their homes.”
“The strong growth that we’ve seen recently is putting pressure on the current capacity of the home improvement industry,” adds Kermit Baker, director of the center's Remodeling Futures Program. “Contractors and subcontractors are having more difficulty finding skilled labor, and building materials costs are unusually volatile for this stage of a recovery.”