PRESS RELEASE

CONTACT: Elizabeth England: (617) 495-7640

CAMBRIDGE, MA – According to the Remodeling Activity Indicator (RAI) devised by Harvard’s Joint Center for Housing Studies, homeowner spending on improvements rose again for the period ending with the third quarter of 2004. Homeowners spent an estimated 129.3 billion dollars on home improvements and repairs over the past four quarters. Spending has increased 5.1% since the third quarter of 2003.

The Director of the Joint Center Nicolas P. Retsinas, remarked, “Job growth and low interest rates continue to facilitate homeowner spending on home improvements, and provide an opportunity to go forward with major remodeling projects.”

Kermit Baker, director of the Remodeling Futures Program of the Joint Center, commenting on the data, “Manufacturers and distributors of home improvement products are reporting strong gains in recent months. Remodeling contractors are increasing overtime for their employees, so home improvement activity should accelerate in the months ahead.”

Since the first release of the Remodeling Activity Indicator (RAI) in 1998, several changes occurred that encouraged a revision in the computation methodology. They include changes in the way remodeling projects are financed, re-benchmarking of the government’s remodeling data, and the introduction of new data sources related to remodeling activity.

While the RAI will continue to be regularly released by the Joint Center’s Remodeling Futures Program during the third week after each quarter’s closing, the result of the revisions produces an indicator that more closely correlates with historical C-50 data. More importantly, with the improved correlation comes an indicator that anticipates the pattern of the business cycle of the C-50 data, so upcoming turning points in improvement spending by homeowners are better predicted by the revised indicator. The next release date is January 13, 2005.

The Joint Center’s Policy Advisory Board and other industry sponsors support the Remodeling Futures Program. The development of the new RAI is detailed in a working paper entitled W04-4: "An Improved Method for Estimating Homeowner Improvement and Repair Activity Through the Remodeling Activity Indicator."

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 Harvard Design School and the Kennedy School of Government. The Director of the Joint Center for Housing Studies since 1998 is Nicolas P. Retsinas. For more information, the website is www.jchs.havard.edu.

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