Reverse mortgage professionals often position the products as solutions for older consumers who want to stay at home but need cash to make aging-friendly upgrades or much-needed repairs — and a new study shows that Americans across the board are planning major renovation projects over the coming year.
Spending on home renovations and repairs will rise by 7.7% through the third quarter of next year, according to the most recent data from the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University.
The group regularly releases its Leading Indicator of Remodeling Activity (LIRA) study, which aims to project the short-term outlook for spending on upgrades to owner-occupied homes. The latest results, rolled out Thursday, represent an increase from the previous projection, which estimated a 6.3% gain in remodeling spending in the fourth quarter of 2017.
All told, the Harvard researchers expect American homeowners to spend more than $330 billion on upgrades, replacements, and routine maintenance over the next year.
“Recent strengthening of the U.S. economy, tight for-sale housing inventories, and healthy home equity gains are all working to boost home improvement activities,” Joint Center for Housing Studies managing director Chris Herbert said in a statement announcing the results.
The Cambridge, Mass.-based organization also noted that the number could be much higher once homeowners in the areas ravaged by hurricanes and other natural disasters begin to rebuild and repair.
“And while it’s too early for our LIRA model to capture the effects of recent hurricanes and other natural disasters experienced around the country, there is certainly potential for even stronger growth in remodeling next year as major reconstruction and repairs get underway in affected regions,” research associate Abbe Will said.
The Joint Center for Housing Studies has calculated its LIRA projections since 2007, and is set to release its next update on January 18.
Written by Alex Spanko