Homeowners' spending on home improvement projects increased modestly to $102.5 billion for the four quarters ending in the first quarter of 2001, according to the Remodeling Activity Indicator developed by Harvard's Joint Center for Housing Studies.
With this level of activity, the growth rate in spending declined to just under 1% during the first quarter, according to Nicolas P. Retsinas, director of the center.
"Spending by homeowners has stabilized in recent quarters at $102 billion to $103 billion per year," Retsinas said. "Given the trends in the components of our Remodeling Activity Indicator, as well as trends in the broader economy, it is likely that spending will remain in this range for the next few quarters."
According to Kermit Baker, director of the center's remodeling futures program, cuts in the prime rate have helped make remodeling projects more affordable at a time when consumer spending in other sectors is beginning to decline.
The indicator is an annual figure released quarterly and is derived from manufacturers' shipments of floor and wall tile products, retail sales at building materials and supply stores, sales of existing single-family homes and the bank prime loan rate.