Spending on home improvements and remodeling have shown signs of a rebound and the Remodeling Futures Program at the Harvard Joint Center for Housing Studies is projecting that sector of the economy will end 2012 on a positive note.

The Joint Center produces the Leading Indicator of Remodeling Activity (LIRA) each quarter.  It is designed to estimate national homeowner spending on improvements for the current quarter and the following three quarters.  The indicator, measured as an annual rate-of-change of its components, provides a short-term outlook of homeowner remodeling activity and is intended to help identify future turning points in the business cycle of the home improvement industry.

The figures from the most recent quarter, the fourth quarter of 2011, showed an estimated four-quarter moving total of $112.4 billion in home improvement spending compared to $113.8 billion in the third quarter.  This number is expected to dip further in the first quarter of 2012, to $108.1 billion before starting to build at mid-year.

 "Sales of existing homes have been increasing in recent months, offering more opportunities for home improvement projects," says Kermit Baker, director of the Remodeling Futures Program at the Joint Center.  "As lending institutions become less fearful of the real estate sector, financing will become more readily available to owners looking to undertake remodeling."