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PRESS RELEASE CONTACT: Elizabeth England: (617) 495-7640 October 18, 2007
(The next LIRA release date is January 17, 2008.) Remodeling Activity Expected to Trend Down in 2008 CAMBRIDGE, MA – The weakness in house prices and consumer confidence has taken a toll on home improvement expenditures, with declines expected to extend well into 2008 according to the leading indicator developed by Harvard’s Joint Center for Housing Studies. The Leading Indicator for Remodeling Activity (LIRA), which builds on the Remodeling Activity Indicator that the Joint Center has been releasing since 1998, notes homeowner spending for home improvement activity will likely decline for the first time since late 2003. Overall homeowner remodeling spending for 2007 is projected to be 2.3% lower than 2006. “As homeowners become increasingly concerned about falling house prices and a slowing economy, home improvement spending is dragging” explains Nicolas P. Retsinas, director of the Joint Center for Housing Studies. “Coupled with very modest home sales, spending levels are likely to fall.” “The recent problems in credit markets are expected to dramatically reduce the level of cash-out mortgage refinancing activity,” comments Kermit Baker, director of the Remodeling Futures Program of the Joint Center. “Given that equity withdrawals have been a key source of funding for home improvements, market spending is expected to suffer.”
The LIRA is a new initiative from the Remodeling Futures Program to estimate future national remodeling activity with a horizon of three quarters. The LIRA replaces the Remodeling Activity Indicator (RAI) previously released by the Joint Center. The LIRA is released quarterly (April, July, October and January) by the Joint Center’s Remodeling Futures Program during the third week after each quarter’s closing. The next release date is January 17, 2008. The Joint Center’s Policy Advisory Board and other industry sponsors support the Remodeling Futures Program. The development of the LIRA is detailed in a working paper entitled "N07-1: Developing a Leading Indicator for the Remodeling Industry." Harvard’s Joint Center for Housing Studies is the nation’s leading center for information and research on housing in the United States. Established in 1959, the Joint Center is a collaborative unit affiliated with the Graduate School of Design and the Kennedy School of Government. The Director of the Joint Center for Housing Studies is Nicolas P. Retsinas. For more information, the website is www.jchs.havard.edu. Future LIRA release dates: January 17, 2008 – Fourth Quarter 2007 -END- For
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