The double-digit gains seen in the home improvement sector will continue in the near term, but the pace is expected to slacken by the second half of next year, according to a new report from the Joint Center for Housing Studies of Harvard University.
The Center’s Leading Indicator of Remodeling Activity shows expected home improvement spending of $148.9 billion in the first quarter of 2014, followed by $147.9 billion in the second quarter.
“The soft patch that homebuilding has seen in recent months, coupled with rising financing costs, is expected to be reflected in slower growth in home improvement spending beginning around the middle of next year,” said Eric S. Belsky, managing director of the Joint Center. “However, even with this projected tapering, remodeling activity should remain at healthy levels.”
A study by home improvement site Houzz.com earlier this year found that the majority of homeowners – 53 percent – think this is a good time to remodel, and 58 percent of those planning projects in the next two years will hire professional help.
Homeowners told the site they would rather cut back on vacations or other big-ticket purchases than delay or decrease their budgets for home plans. While improving the look and feel of a home remains the key driver for recently completed projects, the number of homeowners who remodeled to increase their property value increased to 54 percent from 47 percent in 2012.
The top renovation projects are still bathrooms and kitchens, with 28 percent of respondents to the Houzz study saying they’re planning a bathroom remodel or addition, while 23 percent say they’re planning a kitchen remodel or addition in the next two years.