General strengthening in the housing market over the past 18 months is translating into increased spending on home improvements. Home Remodeling contractors have been reporting improving market conditions for the past four quarters, and are seeing strength in future market indicators.
Spending trends have been on a solid upward slope, with the Leading Indicator of Remodeling Activity (LIRA) projecting continued strengthening of the market through the end of this year 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.”
The Leading Indicator of Remodeling Activity (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.
The LIRA is released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University in the third week after each quarter’s closing.