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| by Abbe Will Research Analyst |
As the broader housing market
continues its sluggish recovery, growth in home improvement spending is also
expected to soften throughout the coming year, according to the Joint Center's most recent Leading Indicator of Remodeling Activity (LIRA) released today. The LIRA projects annual growth in home improvement spending will
decelerate from 6.3% in the first quarter of 2015 to 1.6% by the third quarter.
Due
in part to weakening home sales last year, growth in remodeling spending is expected
to deflate somewhat in 2015. 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. 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.
NOTE ON LIRA MODEL: Beginning with the first quarter 2014 release, long-term interest rates were
removed from the LIRA estimation model. For more information
on the reasons for and implications of this change, please read our blog post from April.
NEW REMODELING REPORT
& LIVE WEBCAST – JANUARY 29
On Thursday, January 29, the Joint Center
for Housing Studies will release its latest biennial report on the remodeling industry, Improving
America’s Housing: Emerging Trends in the Remodeling Market. Almost fully recovered from the recent downturn,
the report identifies the remodeling industry segments that will support further growth in the years ahead. Please join us for
the live
webcast release at 12:00 p.m. Eastern.
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