Signs suggest the depressed remodeling market may be close to a cyclical bottom, according to data released by the Remodeling Futures Program at the Joint Center for Housing Studies of Harvard University, but owner spending on home improvements will continue to trend down through 2009 and into the first part of next year according to the Leading Indicator of Remodeling Activity (LIRA).
“Homeowners are still hesitant to undertake major remodeling projects. While the pace of decline is moderating, increased remodeling activity will not materialize until further signs of recovery emerge in the broader housing market,” says Nicolas P. Retsinas, director of the Joint Center for Housing Studies.
A few components of the LIRA point to renewed strength in the industry, though the overall outlook going into 2010 is still bleak. “There are some positive developments for the remodeling industry, such as low financing costs for home improvement projects and rising home sales in a growing number of markets,” says Kermit Baker, director of the Remodeling Futures Program at the Joint Center for Housing Studies.
DHS Rescinds No-match Rule
The Department of Homeland Security (DHS) announced that it will rescind the 2007 no-match rule, which was blocked by court order shortly after issuance and has never taken effect.
The rule would have established procedures that employers could follow if they received a Social Security Administration (SSA) no-match letters or notices from DHS that call into question work eligibility information provided by employees. These notices most often inform an employer many months or even a year later that an employee’s name and Social Security Number provided for a W-2 earnings report do not match SSA records — often due to typographical errors or unreported name changes. (See June 2008, Qualified Remodeler.)
DHS contended, when the rule was first proposed, that the issuance of a no-match letter was constructive knowledge of an unauthorized employee. Lawyers warn, however, that the no-match letters were only one form of such knowledge, and employers are still required to complete I-9 forms and meet other requirements.
Affordability Shapes Markets
Price declines and low interest rates are motivating millions of home buyers to shop for bargains in the most affordable housing market in 28 years, yet at the same time only one in 10 of today’s homeowners say they have delayed selling their home due to those same market conditions, according to the new national Realtor.com Homeownership Survey.
Based on the Realtor.com survey, affordability is clearly driving more than two-thirds (65.2 percent) of potential buyers back into today’s housing market. Nearly one of five prospective buyers (19.6 percent) say foreclosure bargains in their communities would motivate them to purchase a home, the most important reason they’re interested in buying in the near future. An additional 15.5 percent said they’re motivated to buy soon because they think prices are as low as they will go.