Gains expected in home remodeling
The remodeling activity report from the Joint Center for Housing Studies of Harvard University predicted a slight upward trend in the latter part of 2012, although home improvement spending will lag in the first two quarters.
The Leading Indicator of Remodeling Activity (LIRA), which measures the annual rate of change in consumer spending on renovations, projects $108.1 billion in the first quarter of 2012, a 2.5% decrease. The second quarter, with a projected $110.2 billion in projected spending, is a negative 3.5% drop on the LIRA index.
Remodeling should pick up in the third quarter, when LIRA projects $113.6 billion in home improvement spending, a decline of only 0.2%. If this momentum continues to build during the second half of the year, remodeling activity is on course to end 2012 on a positive note, according to the Joint Center.
“We’re beginning to see some hopeful signs in the economy, and the housing market is finally starting its slow recovery,” said Eric Belsky, managing director of the Joint Center. “That should prove helpful for home improvement spending as the year progresses.”