Consumer spending on home improvements is likely to remain weak for the next several quarters, according to a study released today.
Annual remodeling spending through the first quarter of 2012 will be down 4%, 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,.
In addition, the Census Bureau's improvements spending series, to which the LIRA is benchmarked, was recently revised downwards.
"The recent slowdown in the economy has caused home improvement spending to weaken again," said Eric S. Belsky, managing director of the center. "Falling consumer confidence levels have undermined interest in discretionary remodeling projects."
"What looked to be a promising upturn in home improvement spending earlier this year has begun to stall," says Kermit Baker, director of the center. "Housing starts, existing home sales and house prices have all been disappointing lately, which has dimmed prospects for home improvement spending gains this year."
The LIRA is designed to estimate national homeowner spending on improvements for the current quarter and subsequent three quarters. The indicator 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.
Started by the Joint Center for Housing Studies in 1995, the Remodeling Futures Program examines factors influencing the growth and changing characteristics of housing renovation and repair activity in the U.S.
-Jim McConville