Homeowner spending on major remodeling projects is starting to turn a corner and should begin showing year-over-year increases in 2010, Harvard University's Joint Center for Housing Studies said today.
"Remodeling spending by homeowners shows early signs of stabilization," center director Nicolas P. Retsinas said in a statement. "While the housing recovery has been erratic, a strengthening economy could produce spending increases on home improvement projects by the second quarter of next year."
Homeowners spent roughly $118.1 billion in the 12 months ended June 30, the center estimates. For the next 12 months ending June 30, 2010, the center expects spending to total $107.6 billion, up slightly from its $105.5 billion estimated total for the 12 months from the first quarter of 2009 through March 31, 2010. LIRA measures spending by homeowners on major projects, such as kitchen and bath remodels. It doesn't count spending for regular upkeep, nor does it include spending by landlords on their rental units.
"Favorable financing costs--for those households with access to credit--and a pickup in homes sales are producing more opportunities for home improvement projects," said Kermit Baker, director of the center's Remodeling Futures Program. But he added the market still is beset by unsable prices, near-record foreclosure levels, and other distressed sales, all of which discourage households from undertaking any but the essential remodeling projects.