Home remodeling and repair spending is predicted to slightly decline from 7.3% in 2017’s first quarter to 6.1% in the first quarter of 2018, according to the Leading Indicator of Remodeling Activity (LIRA) published today by the Remodeling Futures Program at the Joint Center for Housing Studies at Harvard University. A previous report in the quarterly feature said spending would surpass 8% by 2017’s second quarter, but today's release indicates slower growth, with home improvement spending declining to 7.1% and reaching about $306 billion next quarter.
Developed originally in 2007, the LIRA is designed to offer a short-term outlook on how much U.S. homeowners are spending within the industry. In April 2016, the report was re-benchmarked to include a broader market based on the American Housing Survey. Once the program determines the annual rate of change for the current quarter and other quarters, it can identify future turning points in the business.
“The remodeling market is approaching a cyclical slowdown after several years of steady recovery,” Abbe Will, research analyst in the Remodeling Futures Program at the Joint Center, said in the press release. “While the rate of growth is starting to trend down, national remodeling expenditures by homeowners are projected to reach almost $320 billion by early next year.”
The previous LIRA, released in January 2017, also started to indicate slower growth by the end of the year with a 6.7% prediction in the fourth quarter. In the newer report, that percentage increased slightly to 6.9%, but it then decreases again to the 6.1% in the beginning of 2018. The next LIRA release date will be July 20, 2017.