Researchers at Harvard announced Thursday they expect remodeling spending will see double-digit growth through the third quarter of 2013.
"It's encouraging to see the residential sector finally contribute to growth in our economy," said Eric S. Belsky, managing director of Harvard's Joint Center for Housing Studies, which published the Leading Indicator of Remodeling Activity (LIRA). "Through the first three quarters of 2012, investment in the residential sector was responsible for one out of every six dollars added to our GDP. Moving forward, home improvement spending is expected to make an even larger contribution to GDP growth."
"There are many external economic and political risks that could derail this remodeling recovery," said Kermit Baker, director of the Remodeling Futures Program at the Joint Center. "However, the solid momentum behind home building activity, existing home sales, low financing costs, and remodeling contractor sentiment all point to a solid start to the new year for home improvement spending."
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.
