HIRI: Home market will rebound in 2009

NEW YORK —A leading research firm says home improvement retailers should expect sales to jump 3% in 2009 as the housing industry finally begins to recover. But until then, they’re going to have to rough it for several more months.

The Home Improvement Research Institute delivered the hopeful news at a “Future Trends in Home Improvement” seminar at the National Hardware Show in Las Vegas. HIRI managing director Fred Miller said he expects the housing market to bottom out this fall and start recovering before the end of the year. But even with a late rebound, total sales are expected to drop 1.5% this year to $302 billion, following a 2% decline to $307 billion in 2007.

The 2007 decline in sales was the first recorded by HIRI since 1991 and a down year in 2008 will be another first for a firm that’s been tracking the industry since 1981. “It will mark the first time we’ve seen sales decline in back-to-back years,” said Miller.

He acknowledged that it’s difficult to predict when a recovery will begin in earnest since the industry is dependent mainly on the movement of a volatile housing market, and current trends are keeping home improvement sales down. “It’s no secret that housing turnover increases the size of the industry,” said Miller. “And with existing housing sales down, the industry is hurting.

He said the 2009 rebound would be followed by more “normalized growth trends” in 2010 and 2011, with sales climbing 5% to 6%. And he noted that future sales trends are going to be driven by aging baby boomers and Hispanics, who will make up 15% of the U.S. population by 2010.