Weak home prices and flagging consumer confidence are expected to take their toll on renovation activity, which is forecast to decrease for the first time since 2003.
The Joint Center, which has tracked renovations since 1998 in its Leading Indicator for Remodeling Activity, expects a decline of 2.3 percent for all of 2007 compared with 2006.
"As homeowners become increasingly concerned about falling house prices and a slowing economy, home improvement spending is dragging. Coupled with very modest home sales, spending levels are likely to fall," Nicolas Retsinas, the center's director, said in a statement.
Retsinas pointed out that the liquidity squeeze that gripped credit markets starting in July put a damper on cash-out refinancing activity, one of the prime methods home owners use to fund big renovation projects.
Home-price declines also affect consumer spending less directly, by eroding the "wealth effect," the feeling of confidence that high home prices boosted during the boom.
The center predicted the decline will continue through at least the first half of 2008 with spending expected to drop 4.2 percent during the three months ending June 30, 2008. Top of page
Real Estate Designers offers totally innovative solutions for your software development, Internet programming, real estate web design and hosting needs. Our service includes domain name registration and real estate web design. Real Estate Designers provides the complete solution including design, application development and marketing.
source: money.cnn.com
No comments:
Post a Comment