A sluggish economy and housing market will continue to weigh down home remodeling spending will into 2012, according to researchers at Harvard. The market is expected to stay soft, with a modest decline in annual remodeling spending over the next several quarters.
"After pulling through the worst of the downturn in home improvement spending, we appear to be entering another period of softening," says Eric S. Belsky, managing director of Harvard's Joint Center for Housing Studies. "The ups and downs in the economy are being reflected in home improvement activity."
"Absent a more sustained upturn in the broader housing market, particularly in the sales of existing homes, there's not much to propel growth in home improvement spending," says Kermit Baker, director of the Remodeling Futures Program at the Joint Center. "Homeowners are continuing to undertake smaller jobs, but are still nervous about larger discretionary projects."
The research was conducted using Harvard's Leading Indicator of Remodeling Activity (LIRA), which is designed to estimate national homeowner spending on improvements for the current quarter and subsequent three quarters.
