The contents of the third-quarter release of the Leading Indicator of Remodeling Activity (LIRA) should come as no surprise to remodelers: Times are getting tougher.

The report, issued on Oct. 21, 2008, by Harvard University’s Joint Center for Housing Studies (JCHS), predicts that homeowner improvement spending will decline at an annual rate of 12% by the second quarter of 2009. The LIRA is released quarterly (April, July, October, and January) by the JCHS’ Remodeling Futures Program. The next release date is Jan. 22, 2009.

“Falling home prices and job losses contribute to reduced spending on homeowner improvements,” said Nicolas P. Retsinas, director of the JCHS, in a press release. “Any remodeling rebound must be accompanied by stability in the housing market.”

The LIRA measures and projects only a portion of the U.S. home improvement market, namely spending by homeowners on property improvements. Its projections do not include components of the broader market, including money spent on home maintenance or repairs, rental improvements, or rental and maintenance repairs.

Joint Center for Housing Studies