Home improvement spending declines again, report shows

A report by analysts at Fitch Ratings puts a fine point on what Atlanta-based Home Depot has been saying for several quarters: Home improvement spending is down for the second straight year in row.

And it’s expected to decline again this year.

In 2008, sales of home improvement products market were $290.5 billion, down 4.5 percent from the previous year. The figures are from the Home Improvement Research Institute.

Residential home repair and alterations continue to decline along with home equity. The average existing home price in March 2009 was $217,300, a 12.1 percent decrease from the previous March, says the Fitch report.

Despite the negative housing trends, the Fitch report said contractors are getting more calls for estimates. Homeowners are looking for affordable, eco-friendly repairs, such as replacing windows and siding.

Homes bought in foreclosure may also present a silver lining.

“Home improvement spending may benefit from banks or new owners renovating these properties,” the report said, though the spending spurt could be temporary.

At Home Depot’s annual shareholders meeting Thursday, CEO Frank Blake was asked about capturing the foreclosure market. “That is an opportunity the Home Depot is addressing directly,” he replied.

In another encouraging sign, the International Council of Shopping Centers and Goldman Sachs reported last week that consumers got out and shopped over Memorial Day weekend.

Weekly sales increased by 0.8 percent, the strongest showing since April 11.