JCHS: Remodeling spending will slow
The COVID-19 pandemic is expected to slow expenditures for improvements and repairs to owner-occupied homes, according to the Remodeling Futures Program at the Joint Center for Housing Studies (JCHS) at Harvard University.
The latest Leading Indicator of Remodeling Activity (LIRA), released today, points to remodeling and repair spending slowing by the middle of 2021.
The JCHS said, assuming continued weakness in the broader economy due to the public health crisis, the LIRA projects annual declines in renovation and repair spending of 0.4% by the second quarter of 2021.
Had it not been for the COVID-19 crisis, the JCHS said that it would have called for increased remodeling activity through the start of the next year.
“The remodeling market was buoyed through the early months of the pandemic as owners spent a considerable amount of time at home and realized the need to update or reconfigure indoor and outdoor spaces for work, school, play, exercise, and more,” said Chris Herbert, managing director of the JCHS. “However, sharp declines in home sales and project permitting activity this spring, as well as record unemployment, suggest many homeowners will likely scale back plans for major renovations this year and next.”
Abbe Will, associate project director in the Remodeling Futures Program at JCHS, said as the pace of do-it-yourself activity, maintenance work, and exterior-focused projects begins to taper, annual expenditures by owners for home improvements and repairs are expected to shrink slightly to $326 billion by the middle of 2021.
“Given the ongoing uncertainty surrounding the broader impact of the pandemic, the timing on when we’ll reach a bottom in the remodeling market also remains unclear,” Will said.
LIRA provides a short-term outlook of national home improvement and repair spending to owner-occupied homes. The indicator, measured as an annual rate-of-change of its components, is designed to project the annual rate of change in spending for the current quarter and subsequent four quarters, and is intended to help identify future turning points in the business cycle of the home improvement and repair industry.