By Daryl Delano
The U.S. Commerce Department reports that expenditures for improvements to, and repairs on, residential properties during the second quarter of 2000 were at a seasonally adjusted annual rate of $148 billion. This pegged April-June 2000 spending at a level 5.7% below the first-quarter 2000 pace — but a solid 15.2% above the annualized spending estimate for the second quarter of 1999.
Regrettably, this is the most current information available from the government; we don’t have any official numbers about what happened in the market over the second half of last year.
The seasonally adjusted annualized spending total was lower during the second quarter of 2000 than in the first quarter for two of the three sub-sectors of the market.
The estimated annualized spending pace for the additions/alterations sub-sector of the market was $67.8 billion, down 9% from the January-March level and almost 19% below the average recorded during the second half of 1999.
Spending in the major replacements category, however, rose to a record-high level during the April-June period of 2000. At a seasonally adjusted annualized rate of $36.8 billion, second-quarter spending improved 4.5% from the first-quarter 2000 pace and was almost 30% higher than during the final six months of 1999.
Spending for household maintenance and repairs, on the other hand, slowed to its weakest annualized pace in a year during the second quarter of 2000. Homeowners spent an estimated 8.3% less on upkeep of existing properties during April-June 2000 than they did over the first quarter of the year.
The less comprehensive Remodeling Activity Indicator developed by Harvard University’s Joint Center for Housing Studies is another market measure — although it doesn’t shed any light on how much money consumers are spending on home maintenance and repair.
The latest JCHS report, which brings us through the third quarter of 2000, estimates that total remodeling expenditures by homeowners were at an annualized level of $99 billion.
The report showed total improvement spending growing at a 3.8% annual rate.