General strengthening in the housing market in the past 18 months is translating into increased spending on home improvements, according to the Leading Indicator of Remodeling Activity (LIRA) released at the end of July 2013 by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
Remodeling contractors have now seen improving market conditions for the previous four quarters, and are seeing strength in future market indicators. Spending trends have been on a "solid upward slope." The LIRA projects continued strengthening of the market through the end of 2013 and into the first quarter of 2014.
"Homeowners are more comfortable investing in their homes right now," says Eric S. Belsky, managing director of the Joint Center. "Consumer confidence scores are back to pre-recession levels, and since recent homebuyers are traditionally the most active in the home improvement market, the growth in sales of existing homes is providing more opportunities for these improvement projects."
"Yet, with housing starts leveling off in the second quarter and financing costs beginning to edge up, we may be seeing the beginning of more measured growth in the residential markets," says Kermit Baker, director of the Remodeling Futures Program at the Joint Center. "Given normal timing patterns, this suggests that the pace of growth for home improvement spending should begin to moderate as we move into 2014."
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