General strengthening in the housing market over the past 18 months is translating into increased spending on home improvements, according to a new report from Harvard’s Joint Center for Housing Studies (JCHS). Remodeling contractors have been reporting improving market conditions for the past four quarters and are seeing strength in future market indicators, the report said, suggesting spending on remodeling will continue to increase through the end of the year and into 2014.

The JCHS’ Leading Indicator of Remodeling Activity (LIRA) is designed to estimate national homeowner spending on improvements for the current quarter and subsequent three quarters. The JCHS predicts that remodeling activity will increase to $150.9 billion in the fourth quarter of 2013 compared with $126 billion for the fourth quarter of 2012.

"Homeowners are more comfortable investing in their homes right now," Eric Belsky, managing director of the JCHS, said in a statement. "Consumer confidence scores are back to pre-recession levels, and since recent homebuyers are traditionally the most active in the home improvement market, the growth in sales of existing homes is providing more opportunities for these improvement projects."

Kermit Baker, director of the Remodeling Futures Program at the JCHS, cautioned that recent gains in housing may moderate in months to come, with rate increases damping down both purchases and new home starts. "Given normal timing patterns, this suggests that the pace of growth for home improvement spending should begin to moderate as we move into 2014," he said in a statement.