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Home Owners Dragging Their Feet on Remodeling Jobs
In tandem with the nation’s housing market, remodeling activity may be in the process of slowing down to a more moderate pace, according to first quarter results for the Remodeling Activity Indicator (RAI) from Harvard’s Joint Center for Housing Studies.
Remodeling by home owners on home improvements and repairs were increasing at an annual rate of about 4.5% during the first three months of this year, about the same as the closing quarter of last year, but significantly slower than the preceding quarters of 2005, when the growth rate was in the 18%-20% range.
Over the past four quarters, home owners spent $155 billion on remodeling, which has been growing over the long term at an annual pace of roughly 5%.
“Rising interest rates and a cooling housing market have started to impact spending on home improvements,” said Nicolas Retsinas, director of the Joint Center. “Delays in initiating major improvement projects are likely to moderate spending over the next year.”
“Remodeling contractors recently have reported a slight decline in hours worked by their employees, and more modest growth of their payrolls,” added Kermit Baker, director of the Remodeling Futures Program of the Joint Center. “This points to remodeling following home building into a period of slower growth in the months ahead.”
For further information on the RAI and the first-quarter results, click here.
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