Homeowner spending on remodeling ended 2004 almost 6% over 2003 levels, according to the Remodeling Activity Indicator (RAI) devised by Harvard's Joint Center for Housing Studies. Kermit Baker, director of the Joint Center's Remodeling Futures Program, said in a press release, “The year ended up, moving in a positive direction. Low long-term interest rates encouraged home buying and home equity loans that are the key drivers in increased spending on home improvements.”
The RAI is compiled quarterly, approximately two weeks after the reference period. It is designed to estimate trends in the U.S. Commerce Department's C-50 report (“Expenditures for Residential Improvements and Repairs”) six months before the C-50 data is released. The RAI was recently revised to improve its accuracy and now includes weighted data in five areas that correlate closely with historical C-50 data: retail building and supply store sales; shipments of building materials; estimated residential improvements; hours worked by remodeling contractors; and existing home sales.
The next release date is April 21, 2005.