The latest release of the Leading Indicator for Remodeling Activity (LIRA) echoes what many have already predicted: The industry slowdown will continue well into 2008.

The LIRA forecast for the four-quarter period ending in mid-2008 is for $173.1 billion in remodeling activity. That total would be a 4.2% decrease from the four-quarter period ending in the second quarter of 2007. The LIRA currently predicts year-over-year remodeling spending to fall 2.3% for the 2007 calendar year.

Credit: Joint Center for Housing Studies

“As homeowners become increasingly concerned about falling house prices and a slowing economy, home improvement spending is dragging,” Nicolas Retsinas, director of the Joint Center for Housing Studies at Harvard University (JCHS), said in a press release. “Coupled with very modest home sales, spending levels are likely to fall.”

Kermit Baker, director of the Remodeling Futures program at the JCHS, commented further. “The recent problems in credit markets are expected to dramatically reduce the level of cash-out mortgage refinancing activity,” he said in the release. “Given that equity withdrawals have been a key source of funding for home improvements, market spending is expected to suffer.”

Figure This

¼ point

Amount by which the Federal Reserve cut the federal funds rate on December 11; the rate now stands at 4.25%

Source: The Federal Reserve

78%

Portion of American workers who said that health care benefits were a critical factor to staying at their current jobs

75%

Portion of American workers who said that compensation was

Source: Spherion/Harris Interactive/“The Emerging Workforce Report”

$4 billion

Cost of electricity used annually in the U.S. for “standby power” for “vampire electronics” (e.g., a cell phone charger left plugged in even when it's not charging a phone)

Source: Department of Energy