Home improvement spending by homeowners edged up in 2005, ending the year growing 4.3% over the 2004 levels, according to the Remodeling Activity Indicator (RAI) devised by Harvard’s Joint Center for Housing Studies.
Homeowners continued to invest in their homes by spending $149.5 billion on remodeling during 2005.
The director of the Joint Center, Nicolas P. Retsinas, remarked, “We are starting to see signs of softening in the remodeling market. Rising short-term interest rates and slowing home price appreciation have tempered homeowner spending on home improvements.”
Kermit Baker, director of the Remodeling Futures Program of the Joint Center, commenting on this year’s trends, “At almost $150 billion in spending by homeowners, home improvement activity continues to be a major sector in our economy.”
The RAI is released quarterly (April, July, October and January) by the Joint Center’s Remodeling Futures Program during the third week after each quarter’s closing—generally about two quarters before the U.S. Commerce Department’s data on residential improvements and repairs is available—in order to provide industry with an accurate and timely reading of national remodeling activity levels.
