by CalculatedRisk on 6/14/2011 11:02:00 PM
The BuildFax Residential Remodeling Index was at 109.7 in April, up from 98.0 in March. This is based on the number of properties pulling residential construction permits in a given month.
The Residential BuildFax Remodeling Index rose 15% year-over-year—and for the eighteenth straight month—in April to 109.7, the highest April number in the index to date.
In April, all regions posted month-over-month gains, and only the Midwest posted a year-over-year loss.
According to Joe Masters Emison, vice president of research and development at BuildFax, “April traditionally sets a baseline for the rest of the year in residential remodeling activity, and April 2011 is the best we’ve seen since the beginning of the index in April 2004.”
Click on graph for larger image in graph gallery.
This is the highest level for the month of April since the index was started in 2004 – and even slightly above the levels for May in 2005 and 2006 (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.
Since 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 15% from April 2010.
As I mentioned earlier today in Key Question: Is the slowdown temporary?, Residential Investment (RI) is a leading indicator for the economy, and RI will will probably make a positive contribution to the economy this year for the first time since 2005. Even though new home construction is still moving sideways, it appears that two other components of residential investment will increase in 2011: multi-family construction and home improvement.
Data Source: BuildFax, Courtesy of Index.BuildFax.co