Remodeling Forecast to Weaken This Year

Cambridge, MA, April 25, 2011 -- Home improvement spending is expected to weaken significantly by the end of the year after a burst this spring, according to the Leading Indicator of Remodeling Activity.

The report from Harvard University's Joint Center for Housing Studies forecasts annual growth up only 0.2 percent in 2011.

The Joint Center points to a slow recovery in the housing market and concern over the pace of economic growth nationally as reasons why home improvement spending will be tempered.

“Recent softness in the housing market and continued pessimism among remodeling contractors point to a slowdown in the remodeling market toward the end of the year,” said Kermit Baker, director of the Remodeling Futures Program.

The Joint Center forecasts stronger growth in the first half of 2011, with spending expected to total $130.2 billion in the second quarter, a 10.3 percent increase over the previous four quarters.

However, spending is forecast to fall in the second half of the year, dropping to $115.2 billion in the fourth quarter.