After a substantial drop last quarter, residential remodeling and repairs made a nice recovery, according to the latest release of the Remodeling Activity Indicator (RAI).
According to the Joint Center for Housing Studies at Harvard University, which publishes the data quarterly, homeowners spent $139.1 billion on home improvements in the four-quarter period ending in the third quarter of 2005. That's $5.8 billion more than a year ago.
In a press release, Kermit Baker, director of the Remodeling Futures Program at the Joint Center, credited home sales, employment rates, and increases in disposable income with the growth in the industry. He added that due to stability in those areas, “remodeling spending should continue growing modestly over the coming quarters.”
The RAI is up 4.4% from one year ago, nowhere near the lofty growth levels of last year (activity increased more than 20% over a four-quarter period in the first quarter of 2005). “After strong gains in home improvement spending in late 2004 and early 2005, the pace of growth appears to have slowed in recent quarters,” said Nicolas P. Retsinas, director of the Joint Center.
The slowdown isn't unexpected. Baker and other industry experts have long been saying that the industry will continue to grow healthily but not at the torrid pace it has seen in recent years.
Credit: Joint Center for Housing Studies