Remodeling activity and builder confidence up
By Alice Liao
Perhaps some of you had a hand in this. BuildFax, which has created a national database on historical building permit data, reported that remodeling activity was up this past August, with an increase of 6.3% from July and 29% from the previous year. August 2011 also represented the 22nd consecutive month of continuous growth since April 2004, when the company’s BuildFax Remodeling Index (BFRI) began tracking numbers.
Not all regions, however, fared equally well. Both the West and the Midwest saw month-over-month gains of 9.3% and 10.8%, respectively, while the South had a slight uptick in activity at 1% and the Northeast experienced a decline of 8%. In addition, BuildFax is estimating that 3.3 million residential remodeling projects will be permitted in 2011—a 9.5% increase from last year, which issued 3.1 million permits.
Want more good news? On the new construction front, the National Association of Home Builders/Wells Fargo Housing Market Index (HMI) for October indicates that builder confidence in the market for single-family homes is up by four points, representing the largest one-month gain since the home buyer tax credit program helped spur the market in April 2010.
But don’t begin celebrating just yet. According to NAHB Chairman Bob Nielsen, despite the vote of confidence, builders are still feeling a little wary, thanks to “overly restrictive lending policies that are discouraging prospective buyers, problems with new-home appraisals and widespread uncertainty regarding federal support for homeownership.” In addition, noted NAHB chief economist David Crowe, foreclosed homes are exerting a negative effect on home prices while the cost of building materials is rising, “further squeezing already tight margins.”
The regional findings of HMI roughly mirror those of BFRI, with the West gaining nine points (the highest for that region since August 2007), the Midwest and the South each logging in with increases of four points; the Northeast stayed unchanged at 15.
This entry was posted on Wednesday, October 19th, 2011 at 4:50 PM and is filed under Business. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.