With home sales beginning to pick up again, are consumers pulling back on their home remodeling plans? Leading Indicator of Remodeling Activity (LIRA) data recently released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University suggests that spending will stay high through the end of the year. After that, consumers may reduce these expenditures.
U.S. Census Bureau data points to the following spending levels for the rest of the year:
- Q3 $145.7 billion
- Q4 $146.2 billion
Compared to spending levels a year ago, the estimated increases amount to 10.9% and 9.9% respectively. If these numbers hold steady, homeowners will have increased total spending for the year to the 9.9% level. However, in Q1 of 2015, we can expect spending to increase only 7% over the same period for the previous year.
The strength of the remodeling market was confirmed by the Remodeling Market Index from the National Association of Home Builders. The index just rose to 56, an indicator that market momentum is increasing.
This index measures:
- Calls for bids
- Amount of work committed for 3 months
- Work backlog
- Appointments for proposals
The NAHB reports that large remodeling jobs, those valued at $25,000 or more, came in at 54. The index for smaller remodeling jobs is at 56 while the repair and maintenance index is at 58. Any level over 50 indicates an expanding market.
According to AudienceSCAN, about 7.8% of U.S. homeowners intend to spend on a new addition or a remodel in the next year. These consumers are more likely than average to also spend money on home decorating, gardening and landscaping projects. Home remodelers over-index in their intent to purchase new window coverings and patio furniture in the next year. Marketers may be able to reach these consumers with direct mail campaigns as 33% of remodelers say they’ve taken action as the result of this type of promotion in the last 30 days.
AudienceSCAN data is available as part of a subscription to AdMall for Agencies. Media companies can access AudienceSCAN data through the Audience Intelligence Reports in AdMall.