An improving housing market and low mortgage interest rates should translate into strong gains in home improvement activity through year-end and into the first half of 2013, according to a remodeling index released by the Joint Center for Housing Studies of Harvard University.
The index, known as the Leading Indicator of Remodeling Activity, or LIRA, predicts that the stage has been set for a powerful remodeling recovery, with annual homeowner improvement spending expected to reach double-digit growth in the first half of 2013.
“After a bump in home improvement activity during the mild winter, there was a bit of a pause this summer," said Eric Belsky, managing director of the Joint Center. "However, the LIRA is projecting an acceleration in market activity beginning this quarter, and strengthening as we move into the New Year.”
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Kermit Baker, the director of the Remodeling Futures Program at the Joint Center, said strong home sales coupled with low financing costs typically translate into an upturn in remodeling.
"While the housing market has faced some unique challenges in recent years, this combination is expected to produce a favorable outlook for home improvement spending over the coming months,” he said.
Residential remodels authorized by building permits rose 15% in July to 3.14 million from the year-ago figure of 2.73 million, according to real estate data provider BuildFax.