A sluggish economy and housing market will continue to hamper home improvement spending well into next year, according to the Leading Indicator of Remodeling Activity (LIRA) released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The remodeling market is expected to stay soft with the LIRA pointing to a modest decline in annual homeowner improvement spending over the next several quarters.
“After pulling through the worst of the downturn in home improvement spending, we appear to be entering another period of softening,” said Eric S. Belsky, managing director of the Joint Center. “The ups and downs in the economy are being reflected in home improvement activity.”
“Absent a more sustained upturn in the broader housing market, particularly in the sales of existing homes, there’s not much to propel growth in home improvement spending,” noted Kermit Baker, director of the Remodeling Futures Program at the Joint Center. “Homeowners are continuing to undertake smaller jobs, but are still nervous about larger discretionary projects.”
The Leading Indicator of Remodeling Activity (LIRA) is designed to estimate national homeowner spending on improvements for the current quarter and subsequent three quarters. The indicator, measured as an annual rate-of-change of its components, provides a short-term outlook of homeowner remodeling activity and is intended to help identify future turning points in the business cycle of the home improvement industry. The LIRA is released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University in the third week after each quarter’s closing. The next LIRA release date is Jan. 19, 2012.