CHICAGO--()--A gradually improving U.S. economy and signs of housing market stabilization may lead to a modest increase in home improvement spending this year, according to Fitch Ratings in a new report.
“Additional federal tax credits in the hands of homeowners may add incentive to complete certain energy-saving home improvement projects”
The home improvement industry is showing early signs of a moderate recovery following three years of declines. There are also early indications that homeowners, although still cautious, are somewhat more willing to undertake discretionary-type projects and purchases. As such, Fitch projects home improvement spending to increase 3.5% in 2010.
Another factor that may help the near-term spending outlook is legislative efforts to expand current federal incentives for energy-efficient home improvement projects. "Additional federal tax credits in the hands of homeowners may add incentive to complete certain energy-saving home improvement projects," said Director Robert Rulla.
The improving outlook is not without its risks, however. Unemployment levels remain high and consumer confidence remains weak. Additionally, consumer credit standards remain tight, although there are signs that banks are somewhat easing credit standards on some consumer loans.
Fitch will be detailing its outlook for home improvement spending during a conference call to take place tomorrow (separate press release to follow). 'The Tale of the 'Measuring' Tape' is available either by clicking the link or by going to 'www.fitchratings.com' under the following headers:
Sectors >> Corporate Finance >> Corporates >> Research
Additional information is available at 'www.fitchratings.com'
Related Research: The Tale of the "Measuring" Tape (U.S. Home Improvement Industry)