Two new reports come to the same conclusion about the outlook for home remodeling: it's an ugly market without much hope of improving anytime soon.
According to a new report from the Joint Center for Housing Studies of Harvard University, the remodeling market is expected to stay soft with consumers actually spending less money on fixing up their homes over the next several quarters.
Hanley Wood, which analyzes market data, also reported a weak market, noting that remodeling activity has declined nationally this year "as consumer confidence explored new lows."
Home improvements are funded mostly by two sources of funds: home equity loans, and cash.
In the wake of the housing crash, most nonbank lenders have totally exited the second lien market and the banks that have remained have done so by severely tightening their underwriting guidelines.
"After pulling through the worst of the downturn in home improvement spending, we appear to be entering another period of softening," said Eric Belsky, managing director of the Harvard Joint Center. "The ups and downs in the economy are being reflected in home improvement activity."
The University adds that absent a "more sustained upturn" in the broader housing market, "there's not much to propel growth in home improvement spending."
