Harvard University's Joint Center for Housing Studies' 4Q 2015 Leading Indicator of Remodeling Activity (LIRA) predicts homeowners will spend more on home improvements this year. LIRA is predicting yearly spending to jump to 7.6% in 3Q 2016 from 4.3% in 1Q of 2016.

The JCHS reports that by the third quarter of 2016, the level of annual spending in nominal terms is predicted to surpass the previous high, which was set in 2006.

On the projected acceleration, Managing Director of the Joint Center for Housing Studies Chris Herbert said, "2016 is looking to be a stronger year for home renovation activity compared to 2015 thanks to the continued recovery in the owner-occupied housing market. In most markets across the country, rising house prices are bringing more homes to the market and increasing sales, which is a large driver of home improvement activity.”

LIRA is an indicator designed to estimate national homeowner spending on improvements for the current quarter and subsequent three quarters. The number reflects spending by homeowners on projects worth at least $500. LIRA doesn't tally smaller homeowner improvements or any spending by landlords on their rental property.

To learn more about the most recent LIRA, click here.