The Harvard Joint Center for Housing Studies predicts continued growth in home remodeling spending through 2021.
There’s more good news for integrators in home remodeling. Home upgrade spending continues to rise, and modest increases are expected to continue into the first part of 2021 before subsiding in the third quarter of 2021. This reverses an earlier prediction that remodeling spending would slow dramatically due to the pandemic.
This is the word from the recent LIRA (Leading Indicator of Remodeling Activity) study from the Remodeling Futures program of the Joint Center for Housing Studies at Harvard University. According to the study, initial concerns about a possible pandemic-induced downturn have largely resolved.
“With greater clarity about the impact of the pandemic on the US economy, and with the surprising resilience of the real estate markets, the Remodeling Futures program no longer offers a downside on home remodeling prospects,” a Harvard press release said. For integrators, this means continuous technical upgrades for customers in existing houses.
“Annual condominium renovation and repair spending is projected to increase from around $ 332 billion today to $ 337 billion in the second half of 2021.”
– Abbe Will, Associate Project Director in the Centre’s Remodeling Futures Program
The LIRA’s standard methodology projects renovation and repair spending to grow 4.1% annually through Q1 2021, with gains dropping to 1.7% through Q3.
“The remodeling market is recovering from the initial shocks caused by the pandemic as homeowners continue to spend a lot of time in their home adapting it for work, school and leisure,” said Chris Herbert, executive director of the Joint Center for Housing Studies. “The rise in DIY and small-project activities is boosting the remodeling market, but it remains to be seen whether the strong sales market this summer will translate into major improvements that would lead to even stronger growth in the coming quarters.”
“Annual condominium renovation and repair spending is projected to increase from around $ 332 billion today to $ 337 billion by the second half of 2021,” said Abbe Will, associate project director of the centre’s Remodeling Futures program.
“While growth is projected to slow down in 2021, the recent surge in property prices and sales activity – including buying second homes – could further spur remodeling and repairs over the next year.”
The Leading Indicator for Remodeling Activities (LIRA) provides a short-term outlook on national spending on home improvement and repair work on condominiums. The indicator, measured as the annual rate of change of its components, is intended to forecast the annual rate of change in spending for the current quarter and subsequent four quarters, and to help identify future turning points in the business cycle of the home improvement and repair industry. Originally developed in 2007, the LIRA was converted to a broader market size in April 2016 based on the biennial American Housing Survey.
The LIRA is released by the Remodeling Futures program at the Joint Center for Housing Studies at Harvard University in the third week after each quarter closes. The next release date for LIRA is January 21, 2021.