The final numbers from the Joint Center for Housing Studies at Harvard University confirm what most of us already knew: 2005 was a good year for remodeling.
The latest update of the Remodeling Activity Index (RAI), released Jan. 13, indicates that homeowners spent $149.5 billion dollars on home improvements last year. That's a 4.3% increase from the 2004 total of $143.4 billion.
In the quarterly press release announcing the data, Kermit Baker, director of the Joint Center's Remodeling Futures program, said, “Home improvement activity continues to be a major sector in our economy.” However, the market seems to be softening, Joint Center director Nicholas Retsinas says.
The latest RAI data is always reported as an aggregate of the last four quarters. So, although 2005 is the most lucrative complete year on record, it's not the most active four-quarter stretch ever. That distinction goes to the period ending with the second quarter of 2005, where the RAI topped $150 billion for the first and, so far, the only time. It is important to note, however, that the census' C-50 data series — upon which the RAI is based — lags a few quarters behind JCHS' projections. The JCHS substitutes C-50 values once they become available, so the RAI for the final two quarters of 2005 is subject to change.