The remodeling sector will start slow but show enough improvement over the year that it will end 2012 on a positive note, according to a key forward indicator tabulated by the Joint Center for Housing Studies at Harvard University.
“We’re beginning to see some hopeful signs in the economy, and the housing market is finally starting its slow recovery,” says Eric S. Belsky, managing director of the Joint Center. “That should prove helpful for home improvement spending as the year progresses.”
The Joint Center’s Leading Indicator of Remodeling Activity estimates national homeowner spending on improvements for the current quarter and subsequent three quarters. Measured as an annual rate-of-change of its components, the indicator provides a short-term outlook of remodeling activity and is intended to help identify future turning points in the business cycle of the home improvement industry.
“Sales of existing homes have been increasing in recent months, offering more opportunities for home improvement projects,” says Kermit Baker, director of the Remodeling Futures Program at the Joint Center. “As lending institutions become less fearful of the real estate sector, financing will become more readily available to owners looking to undertake remodeling.”
The Remodeling Futures Program is a comprehensive study of the factors influencing the growth and changing characteristics of housing renovation and repair activity. The program seeks to produce a better understanding of the home improvement industry and its relationship to the broader residential construction industry.
The LIRA is released in the third week after each quarter’s closing. The next LIRA release date is April 19, 2012.
