Home remodeling activity continues ascension: BuildFax
The BuildFax residential remodeling index in November rose for the 25th straight month from a year earlier, exceeding levels reached during the home-equity withdrawal boom of 2004 to 2006, analysts said.
The index rose to 137.9 from 103.3 in November 2010. The index is down 6.6% from October when it stood at 147.6, a record high. The month-to-month drop was the first since February, likely due to seasonal factors.
"Residential remodeling in 2011 grew substantially above 2010 rates and remained strong through the end of the year,” said Joe Emison, vice president of research and development at BuildFax. “However, we do expect to see the number of remodeling permits decrease on a month-over-month basis for the duration of the winter."
Analysts note that the permits are not adjusted by value, so the index's annual rise 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.
There is a strong seasonal pattern for remodeling. The graph below shows year-over-year monthly changes since 2005:
In November, the West (43.7 points; 43%), the Midwest (14 points; 13.1%) and the South (8.9 points; 10.6%) experienced year-over-year gains The Northeast dropped 5.3 points (6.8%) in the same period.
In terms of month-to-month changes, losses were seen in the West (11 points; 7%), the Midwest (10.5 points; 8.1%), the Northeast (3.5 points; 4.6%) and the South (4.6 points; 4.7%).
BuildFax tracks remodeling activity via building permit activity filed with local building departments across the country.
Write to Justin T. Hilley.
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