According to the Leading Indicator of Remodeling Activity (LIRA), home improvement spending is expected to increase significantly in the first half of 2014. By the second half of the year, spending growth should round to approximately 10% gains. See the graph below for a more comprehensive view of this projected growth:
This is welcome news to the remodeling industry, which is still trying to shake off the difficulties of the last 6 years.
More welcome news? A recent report by the Joint Center for Housing Studies at Harvard (“JCHS”) has more positive results for the home improvement industry. This report claims that “foreclosed properties are being rehabilitated, sustainable home improvements are gaining popularity, older homeowners are retrofitting their homes to accommodate their evolving needs, and the future market potential is immense, as the emerging echo boom generation is projected to be the largest in our nation’s history.”
Eric Belsky, managing director of JCHS, says “the ongoing growth that we’ve seen in home prices, housing starts, and existing home sales is also being reflected in home improvement activity. As owners gain more confidence in the housing market, they are likely to undertake home improvements that they have deferred.”
These sorts of home improvements may be to increase potential resale value, or to improve overall livability in the home. Remodeling Magazine anticipates that replacements, especially door, window, and siding projects, are expected to outperform general remodeling by an ROI of 73.7% to 65.1% –a significant difference.
Overall, it’s positive to hear that 2014 should be a great year in the home improvement industry. How are your profits so far?