The growth rate for big-ticket remodeling projects will ease slightly over the next four quarters but still rise 15.2% to total $147.9 billion over the next four quarters, the Joint Center for Housing Studies (JCHS) at Harvard University predicted today.
JCHS' newest Leading Indicator of Remodeling Activity (LIRA) suggests a slight slowdown from the 17.3% rise forecast for the 12-month period ending in March 2014. (See chart.) “The soft patch that homebuilding has seen in recent months, coupled with rising financing costs, is expected to be reflected as slower growth in home improvement spending beginning around the middle of next year,” Eric S. Belsky, managing director of the Joint Center, said in a statement.
Kermit Baker, director of the Remodeling Futures Program at the Joint Center, noted that existing home sales are still growing at a double-digit pace, and rising house prices are helping homeowners rebuild equity lost during the housing crash.
LIRA focuses on home improvements that cost at least $500. The $147.9 billion in expected spending excludes spending on minor maintenance projects as well as all spending by landlords on their rental properties.