Sunday, May 15, 2011

Residential Remodeling Index increases in March

by Bill McBride on 5/15/2011 09:45:00 PM

The BuildFax Residential Remodeling Index was at 98.0 in March, up from 95.1 in February. This is based on the number of properties pulling residential construction permits in a given month.

From BuildFax:

The Residential BuildFax Remodeling Index rose 14% year-over-year - and for the seventeenth straight month - in March to 98.0, the highest March number in the index aside from March 2006. Residential remodels in March were up month-over-month 2.9 points (3%) from the February value of 95.1, and up year-over-year 12.0 points from the March 2010 value of 86.0. ...

All regions except the Midwest posted year-over-year and month-over-month gains.
...
According to Joe Masters Emison, vice president of research and development at BuildFax, "Significant improvements in the West continue to drive activity nationally to the best year in remodeling since 2006."
Residential Remodeling Index Click on graph for larger image in graph gallery.

This is the highest level for a March since 2006 - and above the level of 2005 (during the home equity and remodel boom).

Note: permits are not adjusted by value, so this doesn't mean there is more money being spent, just more permit activity. Also some smaller remodeling projects are done without permits and the index will miss that activity.

Residential Remodeling Index YoYSince there is a strong seasonal pattern for remodeling, the second graph shows the year-over-year change from the same month of the previous year.

The remodeling index is up 14% from March 2010.

Although new home construction is still moving sideways, it appears that two other components of residential investment are increasing in 2011: multi-family construction and home improvement (based on this index and reports from home improvement retailers).

Data Source: BuildFax, Courtesy of Index.BuildFax.com

Earlier:
Summary for Week Ending May 13th
Schedule for Week of May 15th
The upward slope of Real House Prices