Monday, February 13, 2012

Residential Remodeling Index increases 22.8% year-over-year in December

by Bill McBride on 2/13/2012 12:41:00 PM

The BuildFax Residential Remodeling Index was at 127.4 in December, down from 137.9 in November, but up 22.8% from December 2010. This is based on the number of properties pulling residential construction permits in a given month.

From BuildFax Remodeling Index

The Residential BuildFax Remodeling Index is up 22.8% year-over-year in December 2011 at 127.4 points. Residential remodels in December were down month-over-month 10.5 points (7.6%) from the November value of 137.9, and up year-over-year 23.6 points from the December 2010 value of 103.8.
...
“Remodeling activity slowed from November to December 2011 as it did in 2010 ─ an expected change seen in previous years around the holidays. The BuildFax Remodeling Index is still showing notable year-over-year growth,” said Joe Emison, Vice President of Research and Development at BuildFax.
Residential Remodeling Index Click on graph for larger image.

Although the index declined in December from November, this is the highest level for a December since the index started in 2004, even above the levels from 2004 through 2006 during the home equity ("home ATM") withdrawal boom.

Starting next month, BuildFax will release a seasonally adjusted index.

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 22.8% from December 2010. This is the 26th consecutive month with a year-over-year increase.

For residential investment, multi-family construction and home improvement have already picked up, and it appears single family construction will increase in 2012.

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

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