As home building remains bleak, good news still remains for contractors. Since 2004, BuildFax has been tracking data about home-remodeling activity which was up 22% in May over a year ago, reaching the highest level since BuildFax started.
It is not surprising that people are choosing to remodel their homes though, because underwater mortgages and tight access to credit have squelched many homeowners’ ability to move. The next best thing to buying a bigger house is creating one.
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According to BuildFax Vice President of Research and Development Joe Emison in a news release, “Through the first five months of 2011, we have seen impressive gains within the remodeling index, and May has continued that trend with a record-setting month.” Emison also said, “Even with the continued struggles in the economy, the remodeling industry has been a bright spot, as consumers look to make upgrades to their current homes, rather than purchasing a new residence.”
BuildFax found that remodeling increased month-to-month in all regions: 18% in the Midwest, 12% in the Northeast, 7% in the South and 7% in the West. Numbers were up year-to-year in three regions: 21% in the West, 10% in the South and 9% in the Northeast. In the Midwest, remodeling was down 11% from May 2010.
The National Association of Home Builders reported that its Housing Market Index, which measures builder confidence, rose two points in July, after falling three points in June. But the index, at 15 points, remains far below 50, the number at which sentiment is more positive than negative.
NAHB chief economist David Crowe said in a news release, “We view the upward movement in the July HMI as a correction from an exceptionally weak number in June that was at least partly attributable to negative economic news and the close of a disappointing spring selling season.” Crowe continued “Basically, the market continues to bounce along the bottom, with conditions in some locations beginning to improve.”
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