Group Says Home Improvement Spending on Decline

Cambridge, MA, April 18, 2008--Home-improvement spending is unlikely to pick up until next year, and the second half of this year is likely to be weaker than the first six months, according to Harvard University's Joint Center for Housing Studies.

Remodeling spending is expected to fall by an annual rate of 4.8 percent through the end of this year, due to declining consumer confidence and a softening economy. That is steeper than the 2.6 percent decline the center projected through the third quarter in its last update in January.

The center estimates remodeling spending declined 1.7 percent in 2007.

"Spending on home improvements continues to be sluggish, as homeowners respond to falling home prices," said center Director Nicolas P. Retsinas. "The fall-off in pending home sales suggests a long and slow recovery."

In February, the industry-funded Home Improvement Research Institute, or HIRI, forecast a 1.5 percent decline in 2008 sales of home-improvement products. That would be a slight improvement over the 2 percent decline in 2007, when sales fell for the first time since 1991. The group predicts that sales will rebound by 2.9 percent in 2009.