The home remodeling market should see strong growth in 2014, according to the Leading Indicator of Remodeling Activity (LIRA) released in January by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
“The ongoing growth that we’ve seen in home prices, housing starts and existing home sales is also being reflected in home improvement activity,” said Eric S. Belsky, Joint Center managing director. “As owners gain more confidence in the housing market, they are likely to undertake home improvements that they have deferred.”
“However, the strong growth for this cycle may start to ebb a bit beginning around midyear,” said Kermit Baker, director of the Remodeling Futures Program at the Joint Center and chief economist of the American Institute of Architects.
The double-digit gains in annual home improvement spending projected for the first half of the year should moderate some to just under 10 percent by the third quarter.
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.
The next LIRA release date is April 17, 2014, and will offer a projection beyond mid-year.