The second-quarter 2008 release of the Leading Indicator of Remodeling Activity points to an accelerated downturn in home improvement spending. Harvard’s Joint Center for Housing Studies (JCHS) publishes the leading indicator quarterly, and on July 17 predicted that spending will continue to decline by an annual rate of 11.1% until the first quarter of 2009.
Despite previous projections of modest declines this year, Kermit Baker, the Joint Center’s Remodeling Futures Program director, said that homeowner improvements have, in fact, been hard hit by weak home sales and a growing inventory of unsold homes, and will accelerate in their decline.
However, the recent re-benchmarking of the indicator could make things appear worse than they are. The LIRA was adjusted due to the discontinuation of the U.S. Census Bureau’s Residential Improvements and Repairs Statistic, or C-50 survey. According to the JCHS, it now measures and projects just a portion of the U.S. home improvement market, indicating future trends in homeowner improvement activity but excluding maintenance and repairs. (The LIRA has never measured components of the broader market, such as improvements or maintenance onrental and vacation property.)
Photo Credit: Joint Center for Housing Studies