CAMBRIDGE, MA – The coming year is expected to be another robust one for residential renovations and repairs with growth accelerating as the year progresses, according to the Leading Indicator of Remodeling Activity (LIRA) released today by the Joint Center for Housing Studies of Harvard University. The LIRA projects that homeowner spending on improvements and repairs will approach $340 billion in 2018, an increase of 7.5 percent from estimated 2017 spending.
"Steady gains in the broader economy, and in home sales and prices, are supporting growing demand for home improvements," says Chris Herbert, Managing Director of the Joint Center for Housing Studies. "We expect the remodeling market will also get a boost this year from ongoing restoration efforts in many areas of the country impacted by last year's record-setting natural disasters."
"Despite continuing challenges of low for-sale housing inventories and contractor labor availability, 2018 could post the strongest gains for home remodeling in more than a decade," says Abbe Will, Research Associate in the Remodeling Futures Program at the Joint Center. "Annual growth rates have not exceeded 6.8 percent since early 2007, before the Great Recession hit."
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The Leading Indicator of Remodeling Activity (LIRA) provides a short-term outlook of national home improvement and repair spending to owner-occupied homes. The indicator, measured as an annual rate-of-change of its components, is designed to project the annual rate of change in spending for the current quarter and subsequent four quarters, and is intended to help identify future turning points in the business cycle of the home improvement and repair industry. Originally developed in 2007, the LIRA was re-benchmarked in April 2016 to a broader market measure based on the biennial American Housing Survey.
The LIRA is released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University in the third week after each quarter’s closing. The next LIRA release date is April 19, 2018.
The Remodeling Futures Program, initiated by the Joint Center for Housing Studies in 1995, is a comprehensive study of the factors influencing the growth and changing characteristics of housing renovation and repair activity in the United States. The Program seeks to produce a better understanding of the home improvement industry and its relationship to the broader residential construction industry.
The Harvard Joint Center for Housing Studies advances understanding of housing issues and informs policy. Through its research, education, and public outreach programs, the center helps leaders in government, business, and the civic sectors make decisions that effectively address the needs of cities and communities. Through graduate and executive courses, as well as fellowships and internship opportunities, the Joint Center also trains and inspires the next generation of housing leaders.
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