Remodeling spending is expected to rise by around 7% to total $349.8 billion in the 12-month period through mid-2019, according to the latest Leading Indicator of Remodeling Activity (LIRA) released today by the Joint Center for Housing Studies of Harvard University.

“Although the projected growth for remodeling activity remains strong, the low inventory of existing homes for sale is holding back even larger gains, since significant remodeling and repair often occurs around the time of a sale,” says Abbe Will, associate project director in the Remodeling Futures Program at the Joint Center. “Even so, annual spending on residential improvements and repairs by homeowners is expected to reach nearly $350 billion by the middle of next year." The previous LIRA, released in April 2018, predicted spending would reach $341 billion in 2019’s second quarter with a 7.2% rate of change. The four-quarter growth forecasts have hovered between 6.8% and 7.4% for the past six reports.

LIRA provides a short-term outlook of national home remodeling spending, and is designed to project the annual rate of change in spending for the current quarter and following four quarters.

“Rising home values and increased home equity levels are also encouraging more owners to do larger upgrade and replacement projects," says Chris Herbert, managing director of the Joint Center for Housing Studies.

The next quarterly report will be released in mid-October.