By the Numbers: Home-improvement spending will decline in 2009, says JCHS

12 percent

Year-over-year decline in home-improvement spending projected for 2009, according to the Leading Indicator of Remodeling Activity, or LIRA, a quarterly index put out by Harvard's Joint Center for Housing Studies. (The chart shows the index since 2006.) The languishing LIRA reflects widespread troubles in the housing market. For one thing, decreased real-estate activity means fewer buyers making changes to their new homes. Plummeting property values, meanwhile, reduce the incentive for existing homeowners to make upgrades and provide less equity for those still willing to start a project.

"Lower financing costs are beginning to stabilize the downturn in existing home sales, as they also are reducing the cost of financing a home improvement project" said Kermit Baker, director of the Remodeling Futures Program of the Joint Center for Housing Studies, in a release. "However, they have not been enough to offset rising unemployment and falling consumer confidence and encourage homeowners to undertake major home improvement projects," added Baker. e-mail | Twitter

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