Arlington-based Custom Contracting remodeled this kitchen at a home in Concord. Business was brisk for local remodelers in the spring and summer but a slowdown is forecast for the fall and winter.

Despite predictions that remodeling activity would be flat or even slower this year, local contractors are reporting that business was brisk in the spring and summer. Some are forecasting, however, that business will flatten this fall and winter, given the slowdown in phone calls and inquiries from prospective customers in recent weeks.

While other industries suffered heavy losses in recent years, the remodeling industry was one of the few to experience growth. Remodeling activity has been booming for the last seven years nationally and locally. An estimated $164 billion was spent on home improvements, maintenance and repairs in 2002, according to Harvard University’s Joint Center for Housing Studies.

In July, the Joint Center for Housing Studies revealed that during the previous four quarters, expenditures for remodeling rose 6.1 percent and total spending exceeded $122 billion.

“Given a resilient housing market and low interest rates, homeowners continue to reinvest in their homes in the midst of a sputtering economy,” the center’s director, Nicolas P. Retsinas, was quoted as saying.

According to the center’s experts, the remodeling industry has benefited from several years of rising homeownership rates, rapid home price increases and low interest rates.

Locally, remodelers say sales activity picked up significantly in the spring and summer. Bob Ernst, chairman of the Remodelers’ Council of Greater Boston, said that late last year and early this year it appeared that remodeling would slow down and remain flat in 2003. But Ernst, who is vice president of FBN Construction in Hyde Park, said that started to change for him and other remodelers as soon as April.

“The market turned almost drastically for us in April or May,” said Ernst.

Low interest rates, the progress on the war with Iraq, and the slight upswing of the stock market could have boosted consumer confidence and remodeling, according to local contractors. Many economic experts credit the historically low mortgage interest rates with helping the remodeling industry in recent years.

The low rates pushed many homeowners to refinance and take cash from their home equity for home improvements and remodeling jobs. According to the Joint Center for Housing Studies, an estimated $180.2 billion of homeowners’ equity was converted into cash during 2001 through 2002, and about a third of that amount was spent for remodeling.

‘Worthwhile’ Investment

With interest rates edging upward in the last few weeks, some have expressed concern that it could affect the remodeling industry. But Ernst believes that the rates are still low enough to keep activity solid.

“Given that there’s not much money to be made in most traditional investments, I feel that people feel it’s really worthwhile to invest in their homes,” said Ernst.

The most successful remodelers in recent months have been those who have been marketing their services, instead of only relying on referrals, according to Shawn McCadden, an instructor and founder of the Residential Design Build Institute in Burlington.

“I still believe that people are pursuing remodeling … but I also believe that they’re a little bit more price-conscious than they were,” said McCadden, owner of Custom Contracting in Arlington.

Across the country, major bathroom and kitchen remodeling projects appear to be the most popular. More than 5 million bathrooms and nearly 4 million kitchens were remodeled or improved during 2000 and 2001. Owners making major kitchen improvements costing $10,000 or more accounted for almost $11 billion of the $14 billion spent each year in that category. Major bathroom improvements and additions costing at least $5,000 contributed $8.3 billion of the $10.6 billion spent annually on bathroom projects.

McCadden is optimistic about the future business. “The prospects going forward are actually good, if the economy stays consistent [and] we don’t have any dramatic national terrorist issues within our country, everything I’m reading and feeling is that prospects are looking really good,” he said.

Ernst was more cautious. He predicted that remodeling would be flat this fall and winter. Typically, during this time of year, remodelers are flooded with phone calls from homeowners who want remodeling projects finished before the holidays, or they’ll get calls from consumers who want to reserve a spot for the spring.

But Ernst said that for many local remodelers that hasn’t been the experience so far this year.

Aglaia Pikounis may be reached at apikounis@thewarrengroup.com.