Spending on major home improvement projects will decline through the middle of this year from 2009 levels before recovering in the fourth quarter, the Remodeling Futures Program at Harvard University's Joint Center for Housing Studies forecast today.
The center's Leading Indicator of Remodeling Activity (LIRA) indicates that homeowner improvements for the four quarters ended June 30 were likely to drop to $110.9 billion, or roughly 4.2% lower than the previous four quarters, and then decline again to $107.7 million in the four quarters ended Sept. 30, again down 4.1% from the previous 12-month period. But four-quarter spending for all four quarters of 2010 should total $117.6 billion, or 5% better than in 2009, the center reported. And for the four-quarter period through the first three months of 2011, it predicted spending would total $128.8 billion, or 12.4% above the previous four quarters' performance. (Click here to view the LIRA chart.)
"Absent a reversal of recent economic progress, there should be a healthy upturn in home improvement activity by year-end and into next year," Eric S. Belsky, the joint center's managing director, said in a news release.
The homeowner improvements that LIRA measures generally are big-ticket items, such as kitchen and bath remodels and additions to existing homes. The dollar totals exclude general maintenance and repair as well as all spending on rental properties.
"The recovery in home improvement activity appears to be moving beyond simple replacement projects and energy retrofits to broader remodels and upgrades," said Kermit Baker, director of the center's Remodeling Futures Program. "A wider activity base would help generate the expected growth in the quarters ahead."