This article originally appeared on the REMODELING website.
Annual growth in remodeling spending is expected to slow considerably by the end of the year, according to the latest Leading Indicator of Remodeling Activity (LIRA) released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects gains in renovation and repair spending will shrink to 5.1% in 2019, nearly 2.5 percentage points lower than 2018.
“Slowing house price appreciation, flat home sales activity, and rising mortgage interest rates are deflating owners’ interest in making major investments in home improvements this year,” Chris Herbert, managing director of the Joint Center for Housing Studies, said. Continued slowdowns in home building, sales of building materials, and remodeling permits all point to a more challenging environment for home remodeling in 2019.”
Despite the growing headwinds, Abbe Will, the associate project director in the Remodeling Futures Program at the Joint Center, says improvement and repair spending are still set to expand to over $350 billion in 2019.
The previous LIRA, released in October 2018, predicted year-over-year increases in residential remodeling expenditures would start to drift downward to 6.6% through the third quarter of 2019.
LIRA provides a short-term outlook of national home remodeling spending and is designed to project the annual rate of change in spending for the current quarter and following four quarters.
The next quarterly report will be released in mid-April.
