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hroughout the coming year, homeown- er remodeling activity is projected to accelerate, keeping the rate of growth above its long-term trend, according to the Leading Indicator of Remodeling Activity (LIR A) released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University. e LIRA anticipates growth in home improvement and repair expenditures will reach 8.0 percent by the start of 2017, well in excess of its 4.9 percent historical average. "A healthier housing market, with rising house prices and increased sales activity, should translate into bigger gains for remodeling this year and next," says Chris Herbert, managing director of the Joint Center. "As more homeowners are enticed to list their properties, we can expect in- creased remodeling and repair in preparation for sales, coupled with spending by the new owners who are looking to customize their homes." "By the middle of next year, the national remod - eling market should be very close to a full recovery from its worst downturn on record," says Abbe Will, research analyst in the Remodeling Futures Program at the Joint Center. "Annual spending is set to reach $321 billion by then, which after adjusting for inflation is just shy of the previous peak set in 2006 before the housing crash." As of April 21, 2016, the LIR A has undergone a major re-benchmarking and recalculation in order to better forecast a broader segment of the national residential remodeling market. For more information, see the Remodeling Futures' blog and read the research note Re-Benchmarking the Leading Indicator of Remodeling Activity. e LIRA provides a short-term outlook of na- tional home improvement and repair spending to owner-occupied homes. e indicator, measured as an annual rate-of-change of its components, is designed to project the annual rate of change in spending for the current quarter and subsequent four quarters, and is intended to help identify future turning points in the business cycle of the home improvement and repair industry. Originally developed in 2007, the LIRA was re-benchmarked in April 2016 to a broader market measure based on the biennial American Housing Survey. e LIR A is released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University in the third week after each quarter's closing. e next LIRA release date is Oct. 20. Homeowner Remodeling Activity to Accelerate MARKET FORECAST continued Harvard's LIRA points to above-average gains in home renovation and repair spending NEWS Remodeling Market Index holds steady in second quarter The National Association of Home Builders' (NAHB) Remodeling Market Index (RMI) posted a reading of 53 in the second quarter of 2016. Although it slipped one point from the previous quarter, it is still the 13th consecutive quarter with a read- ing above 50. An RMI above 50 indicates more remodelers report market activity is higher (compared to the prior quarter) than report it is lower. The overall RMI averages ratings of current remodeling activity with indicators of future remodeling activity. "Overall, remodelers are reporting steady work in the second quarter," says 2016 NAHB Remodelers Chair Tim Shigley, CAPS, CGP, GMB, GMR, a remod- eler from Wichita, Kan. "With an increase in calls for bids, we should see the market pick up slightly moving forward." The RMI's current market conditions index came in at 54, decreasing by a single point from the previous quarter. Among its components, major additions and alterations dipped three points to 52, minor additions and alterations fell one point to 53, and maintenance and repair remained unchanged at 56. At 53, the RMI's future market conditions index remained un- changed from the previous quar- ter. Among its four components, calls for bids increased two points to 53, the amount of work committed rose one point to 53 and appointments for proposals stayed even at 52. Meanwhile, the backlog of remodeling jobs decreased five points to 53. "At slightly above 50, the over- all RMI is in line with our forecast of steady growth in the remod- eling market for 2016," says NAHB Chief Economist Robert Notes: The former LIRA modeled homeowner improvement activity only, while the re-benchmarked LIRA models home improvement and repair activity. Historical estimates are produced using the LIRA model until American Housing Survey data becomes available. Source: Joint Center for Housing Studies of Harvard University T Historical Estimates LIRA Projections HOMEOWNER IMPROVEMENTS FOUR-QUARTER MOVING TOTALS BILLIONS OF $ FOUR-QUARTER MOVING RATE OF CHANGE $241.6 $246.0 $249.7 $256.9 $263.0 $269.4 $272.6 $277.2 $281.4 $285.2 $285.7 $291.2 $297.3 $302.9 $307.7 $314.5 $320.8 2 3 4 2014-1 2 3 4 2015-1 2 3 2 3 (P) 4 (P) 4 2016-1 2 (P) 2017-1 (P) 3.6% 5.2% 6.4% 8.2% 8.8% 9.5% 9.2% 7.9% 7.0% 5.9% 4.8% 5.1% 5.7% 6.2% 7.7% 8.0% 7.9% -5% 0% 5% 10% 15% 225 275 325 375 425 Leading Indicator of Remodeling Activity — Second Quarter 2016 12 August 2016 QR QualifiedRemodeler.com IN BRIEF