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Tuesday, March 15, 2011

Residential Remodeling Index shows strong increase year-over-year

by Calculated Risk on 3/15/2011 12:11:00 PM

The BuildFax Residential Remodeling Index was at 99.0 in January. This is based on the number of properties pulling residential construction permits in a given month.

From BuildFax:

The Residential BuildFax Remodeling Index rose 22% year-over-year—and for the fifteenth straight month—in January to 99.0, the highest January number in the history of the index, which starts in 2004.
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All regions posted year-over-year gains, although the Northeast continues to lag behind the other regions.
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According to Joe Masters Emison, vice president of research and development at BuildFax, "As of today, the BuildFax Remodeling Index gives clear indication that every region and the nation as a whole is seeing increased remodeling activity from the low point of the recent recession. The Midwest, West, and the nation as a whole have recovered to pre-recession levels or better, while the South and Northeast are still recovering."
Residential Remodeling Index Click on graph for larger image in graph gallery.

Although down month-to-month (off 5% from December) this is the highest level for a January since BuildFax started tracking permit data.

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% from January 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).

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