Harvard JCHS: Growth Slowing In Home Remodeling In 2015

Thursday, January 15, 2015, 11:49am

As the broader housing market continues its sluggish recovery, growth in home improvement spending is also expected to soften throughout the coming year, according a new report from Harvard's Joint Center for Housing Studies (JCHS). The JCHS's Leading Indicator of Remodeling Activity (LIRA), an index created by the center's Remodeling Futures Program, projects annual growth in home improvement spending will decelerate from 6.3 percent in the first quarter of 2015 to 1.6 percent by the third quarter.

"Due in part to weakening home sales last year, growth in remodeling spending is expected to deflate somewhat in 2015," Chris Herbert, managing director of the JCHS, said in a statement. "Homeownership rates continue to slide as lending remains tight and first-time homebuyers are not yet returning to the market."

"Although contractor sentiment has cooled in recent quarters, it remains favorable overall," Abbe Will, a research analyst in the Remodeling Futures Program, said in a statement. "House price gains are moderating but still strong and home sales appear to be turning a corner now, all of which bodes well for continued, if more moderate, home improvement gains for 2015."

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Harvard JCHS: Growth Slowing In Home Remodeling In 2015