Remodeling activity will show overall growth in 2007, but it will be much more modest than what the industry has seen in recent years, according to the Joint Center for Housing Studies at Harvard University (JCHS).
The latest release of the Leading Indicator for Remodeling Activity (LIRA) projects just over $183 billion in home improvement spending in 2007, 3% growth from the previous calendar year. That follows 6.8% growth in 2006 — a healthy rate but far below the “boom” years in the early part of this decade.
Though the housing market has become quite soft, remodeling remains buoyed by those record-setting years of the recent past, during which home values skyrocketed. “Homeowners continue to draw on built-up equity in their homes to finance home improvements,” Nicolas Retsinas, director of JCHS, said in a press release.
“Owners are still able to take advantage of the run-up in their house's value over the past decade to finance home improvement projects,” added Kermit Baker, director of the Remodeling Futures Program at JCHS. So even as concerns rise about housing affordability, remodelers should continue to see a fair amount of business from people who have built up equity by owning their homes for at least a few years.