National home improvement and repair spending is expected to continue its steady climb with a predicted jump in spending from the second quarter of 2018 to the third, according to the Q3 Leading Indicator of Remodeling Activity (LIRA) released today by the Remodeling Futures Program at the Joint Center for Housing Studies at Harvard University. From Q4 2017's estimate to Q3 2018’s prediction, the rate of change is estimated to increase by 1.4 percentage points or $18.9 billion.
The LIRA is designed to provide a short-term outlook on the improvement spending habits of U.S. homeowners. It measures the current annual rate of change and predicts the future rates for the next four quarters to determine major turning points in the industry.
“Recent strengthening of the U.S. economy, tight for-sale housing inventories, and healthy home equity gains are all working to boost home improvement activity,” says Chris Herbert, managing director of the Joint Center for Housing Studies. “Over the coming year, owners are projected to spend in excess of $330 billion on home upgrades and replacements, as well as routine maintenance.”
The Q2 2017 report, released in July, also predicted healthy and stable growth within the industry, but not as robust. According to last quarter’s projections, the activity was estimated to remain at or slightly above 6% through the second quarter of 2018.
In the newly released report, the estimate for Q2 2018 reads a 6.7% rate of change and will likely jump to 7.7% in Q3 2018. Although the reason for the hike is unclear, recent hurricanes and other natural disasters in the country could be a cause. There's also potential for even stronger growth next year as reconstruction begins. Stay tuned for 2017’s last quarter report in mid-January.
