Harvard index forecasts strong remodeling recovery

NEW YORK (AP) — Contractors who remodel and repair homes can look forward to a strong 2013, according to a study released Thursday by Harvard University.

Harvard's Joint Center on Housing Studies said its latest Leading Indicator of Remodeling Activity points to a 19.7 percent increase in home improvement spending during the third quarter from the same period of 2012.

Spending is expected to rise 10.6 percent this quarter and 16.8 percent in the second three months of the year. The index is compiled from data including the number of home sales and the amount of money spent on home construction.

The report had a caveat: Economic and political factors could stifle the recovery in the remodeling industry. However, spending on home repairs and improvement is closely tied to the housing market, because many homeowners fix up their homes either before they sell or after they buy. And home sales are continuing their recovery from the housing market collapse — new home sales rose in November at the fastest pace since April 2010, while sales of previously occupied homes rose to the highest level in three years.

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