Cambridge, Mass. -- Home remodeling activity will remain weak through the first half of 2012, creating a challenge for electronic systems contractors who have refocused on the retrofit and remodeling business, a Harvard University study found.
Harvard's Joint Center for Housing Studies forecasts a modest decline in annual homeowner improvement spending in the fourth quarter of 2011 and first half of 2012 (see table).
"After pulling through the worst of the downturn in home improvement spending, we appear to be entering another period of softening," said Eric S. Belsky, the center's managing director. "Absent a more sustained upturn in the broader housing market, particularly in the sales of existing homes, there's not much to propel growth in home improvement spending," added Kermit Baker, director of the center's Remodeling Futures Program. "Homeowners are continuing to undertake smaller jobs, but are still nervous about larger discretionary projects."
The center estimated national homeowner spending on improvements for the third quarter of 2011 and subsequent three quarters. In devising a four-quarter moving total of consumer remodeling expenditures, the center said the four-quarter moving total in the fourth quarter of 2011 will fall to $111 billion, down from a third-quarter figure of $116.8 billion. At $111 billion, the fourth-quarter figure would be one of the lowest moving totals accumulated by te center during the past 14 quarters beginning in 2008's third quarter. The center expects the figure to fall again in the first quarter of 2012 to $105.8 billion and move back up in the second quarter to $110.1, still among the lowest figures since 2008's third quarter.