Home improvement spending continues to decline

The home equity-financed home improvement boom of the first part of this millennium has come to a halt, and that wood paneling in the dining room is likely to stay there until the economy improves.

Harvard University's Joint Center for Housing Studies reports that spending on home improvement projects will decline at annual rate of 12.1% in the third quarter of 2009, following a 4.5% decline in 2008.

There are a few factors behind the decline. Home equity loans are harder to get and the pace of home sales has slowed considerably -- a lot of people remodel shortly after buying a home so fewer home sales means less remodeling.