Growth in Home Remodeling Expected to Decrease Next Year
Annual growth in national home improvement and repair spending is expected to decrease in 2019, according to the Leading Indicator of Remodeling Activity (LIRA) that was released today by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. The LIRA projects that year-over-year increases in residential remodeling expenditures will reach a decade high of 7.7 percent this year and then start to drift downward to 6.6 percent through the third quarter of 2019. This could be a cautionary sign for the security industry considering between 7 and 12 percent of new home construction is devoted to electronics, according to data from the National Association of Home Builders, and a percentage of remodeling budgets often goes to electronic security.
“Rising mortgage interest rates and flat home sales activity around much of the country are expected to pinch otherwise very strong growth in homeowner remodeling spending moving forward,” said Chris Herbert, managing director of the Joint Center for Housing Studies. “Low for-sale inventories are presenting a headwind because home sales tend to spur investments in remodeling and repair both before a sale and in the years following.”
“Even so, many other remodeling indicators including home prices, permit activity and retail sales of building materials continue to strengthen and will support above-average gains in spending next year,” said Abbe Will, associate project director in the Remodeling Futures Program at the Joint Center. “Through the third quarter of 2019, annual expenditures for residential improvements and repairs by homeowners is still expected to grow to over $350 billion nationally.”