Harvard: Home Remodeling Spending Will Grow But More Slowly

According to the Joint Center for Housing Studies at Harvard University, the home remodeling market should enjoy solid growth this year but momentum may begin to moderate in the fourth quarter. The Leading Indicator of Remodeling Activity study released today by the university’s Remodeling Futures Program suggested that sluggishness in the housing market and specifically in home sales could decelerate year-over-year home improvement spending.

The study indicated that double-digit annual growth through the third quarter may slow to the high single digits by year’s end.

“The housing recovery has at least temporarily lost some of its momentum,” Eric Belsky, the center’s managing director, said in introducing the data.  “And as a result, remodeling spending is expected to follow suit and see slower growth beginning later this year.”

Kermit Baker, director of the Remodeling Futures Program, noted,  “Home improvement spending has already recovered a significant share of its losses from the downturn. As spending moves into the next phase, we expect to see recent double-digit growth tail off to its longer-term average in the mid-single-digit range.”