Pick-Up Projected in Home Improvement Activity Moving into 2016
The extended easing of gains in residential improvement spending is expected to change course by early next year, according to the Leading Indicator of Remodeling Activity (LIRA) released today by the Remodeling Futures Program at the Joint Center for Housing Studies. The LIRA projects annual spending growth for home improvements will accelerate to 4.0% by the first quarter of 2016 (Figure 1).
One strong signal of a pick-up in home improvement activity is the recent rise in home sales activity, since recent homebuyers typically spend about a third more on home improvements than non-movers, even after controlling for any age or income differences. In addition, rising home prices across the country mean rising equity, which should encourage improvement spending by homeowners.
The Leading Indicator of Remodeling Activity (LIRA) is designed to estimate national homeowner spending on improvements for the current quarter and subsequent three quarters. For more information about the LIRA, including how it is calculated, please visit the LIRApage on the Joint Center’s website. The LIRA is released by the Remodeling Futures Program at the Joint Center for Housing Studies in the third week after each quarter’s closing.