Residential home improvement spending, currently undergoing a period of gradual decreases, is expected to reverse course in early 2016, according to the Leading Indicator of Remodeling Activity released by the Joint Center for Housing Studies of Harvard University.
The fourth quarter 2015 LIRA is projected at 3.4 percent, which should increase to 4.4 percent in the first quarter and 6.8 percent in the second quarter of 2016, according to the center.
The LIRA is projected to increase because of the increase in home sales activity, said Chris Herbet, managing director of the Joint Center, in a statement.
“Recent homebuyers typically spend about a third more on home improvements than non-movers, even after controlling for any age or income differences, so increasing sales this year should translate to stronger improvement spending gains next year,” he said.
Other signals that point to an increased amount of home improvements include growth in sales of home improvement products and gains in house prices across the country, research analyst Abbe Will said.
