A still-stalled housing recovery and concern over the pace of economic growth nationally are likely to generate only modest gains in home improvement spending this year, according to the Leading Indicator of Remodeling Activity (LIRA).
The study, released by The Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, projected annual growth slowing throughout the year with spending up only 0.2 percent in 2011.
“Given all the economic uncertainty that we’re seeing nationally, the home improvement recovery is expected to be rocky,” said Eric S. Belsky, managing director of the Joint Center. “Spending patterns through the remainder of the year are expected to reflect recent volatility in the housing market.”
According to Kermit Baker, director of the Remodeling Futures Program at the Joint Center, “Recent softness in the housing market and continued pessimism among remodeling contractors point to a slowdown in the remodeling market toward the end of the year.”
The 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.