U.S. home improvement activity is expected to show strong improvement through the end of 2012 and the first half of 2013, according to the Leading Indicator of Remodeling Activity (LIRA) from the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The improvement is being driven by an improving housing market and record low interest rates.
The report suggests that "the seeds for what appears to be a very robust remodeling recovery have been planted," and said it expects annual homeowner improvement spending to reach double-digit growth in the first half of 2013.
"After a bump in home improvement activity during the mild winter, there was a bit of a pause this summer," said Eric S. Belsky, managing director of the Joint Center. "However, the LIRA is projecting an acceleration in market activity beginning this quarter, and strengthening as we move into the new year."
"Strong growth in sales of existing homes and housing starts, coupled with historically low financing costs, have typically been associated with an upturn in home remodeling activity some months later," said Kermit Baker, director of the Remodeling Futures Program at the Joint Center. "While the housing market has faced some unique challenges in recent years, this combination is expected to produce a favorable outlook for home improvement spending over the coming months."
The LIRA is designed to estimate national homeowner spending on improvements for the current quarter and subsequent three quarters. The indicator is measured as an annual rate-of-change of its components and provides a short-term outlook of homeowner remodeling activity. It is intended to help identify future turning points in home improvement industry.
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