by CalculatedRisk on 8/15/2011 09:05:00 AM
The BuildFax Residential Remodeling Index was at 129.5 in June, up from 124.3 in May. This is based on the number of properties pulling residential construction permits in a given month.
The Residential BuildFax Remodeling Index rose 23% year-over-year–and for the twentieth straight month–in June to 129.5, the highest number in the index to date. Residential remodels in June were up month-over-month 5.2 points (4%) from the May value of 124.3, and up year-over-year 24.5 points from the June 2010 value of 105.0.
In June, the West (7.3 points; 6%), the Midwest (11.2 points; 13%), and the South (< .1 points; < 1%) all had month-over-month gains, while the Northeast saw a decline (3.7 points; 4%). … “The first half of 2011 brought pain to many sectors of the economy including home sales and jobs, however Americans continue to invest in remodeling, sending the BuildFax Remodeling Index to a new all-time high,” said Joe Emison, Vice President of Research and Development at BuildFax. “With so many Americans unable to sell their current home, it is apparent that they are planning on staying in their current residences and are making renovations and upgrades.”
This is the highest level for the index (started in 2004) – even above the levels from 2004 through 2006 during the home equity (“home ATM”) withdrawal 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.
The remodeling index is up 23% from June 2010.
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.com