Gains in home renovation and repair spending are approaching pre-downturn levels, according to the latest Leading Indicator of Remodeling Activity (LIRA) released today by Harvard's Joint Center for Housing Studies. This short-term outlook on remodeling spending predicts that spending growth will continue, reaching around 8% by the start of 2017.
"A healthier housing market, with rising house prices and increased sales activity, should translate into bigger gains for remodeling this year and next,” said Chris Herbert, managing director of the Joint Center, in a press release. “As more homeowners are enticed to list their properties, we can expect increased remodeling and repair in preparation for sales, coupled with spending by the new owners who are looking to customize their homes to fit their needs.”
The report suggests annual remodeling spending should exceed $300 billion this year, and approach the previous peak, set in 2006.
“By the middle of next year, the national remodeling market should be very close to a full recovery from its worst downturn on record,” said Abbe Will, research analyst in the Remodeling Futures Program at the Joint Center. “Annual spending is set to reach $321 billion by then, which after adjusting for inflation is just shy of the previous peak set in 2006 before the housing crash.”
The LIRA was recently re-benchmarked to include both home-improvement and repair activity. The next LIRA is scheduled to be released Oct 20.