The Leading Indicator of Remodeling Activity predicts spending on remodeling projects will increase 8.6% by the end of 2016 and reach 9.7% in the first quarter of 2017 according to a release Thursday morning. Conducted by the Joint Center for Housing Studies of Harvard University, LIRA predicts that spending on remodeling will reach nearly $325 billion by early 2017.

"Ongoing gains in home prices and sales are encouraging more homeowners to pursue larger-scale improvement projects this year compared to last with permitted projects climbing at a good pace," said Chris Herbert, managing director for the Joint Center, in a press release. "On the strength of these gains, the level of annual spending for remodeling and repairs is expected to reach nearly $325 billion nationally by early next year."

This updated version of LIRA reflects a change in the analysis of the housing market, focusing on a broader segment of the housing market including improvement and repairs to homes. The former LIRA model only took into account home improvement numbers. According to Abbe Will, a research analyst with the Join Center, this change makes LIRA, "somewhat less cyclical, but still anticipates turning points in the market well."

Click here to read the full press release.