Remodeling activity returns to pre-recession levels, according to BFRRI

Remodeling activity has returned to pre-recession levels, posting an index value of more than 100 for seven straight months, the first such streak since the second half of 2007, according to theBuildFax Residential Remodeling Index data for November 2010. Combined with the depressed number of new housing starts, a significant increase in remodeling activity might indicate a more substantial shift toward reinvesting in existing homes over building new ones, according to a Jan. 18 BuildFax release.

On a regional basis, the South and the Northeast continue to lag behind the Midwest and West, with the Northeast still in a year-over-year decline as of November 2010. While the South is up year-over-year, it suffered its fifth straight month of decline in November 2010. The BFRRI for the Northeast was down 2 percent month-over-month and down 6 percent year-over-year; the South was down 5 percent month-over-month, but up 8 percent year-over-year; the Midwest was down 3 percent month-over-month but up 4 percent year-over-year; and the West was down 1 percent month-over-month, but up 5 percent year-over-year.

To gauge national remodeling activity, BuildFax, co-headquartered in Austin, Texas, and Asheville, N.C., launched the BuildFax Residential Remodeling Index this month. The index reports residential remodeling activity across the United States. The information is derived through related building permit activity filed with local building departments across the country.

The BFRRI will report trends in remodeling activity for the entire United States, as well as for the four major regions of the country: the Northeast, South, Midwest and West. Updates to the index will be released in the middle of each month, on the day preceding the Census’ release of new housing starts.

“We at BuildFax know that looking at new construction only provides part of the full picture of home investment,” said Joe Emison, vice president of Research and Development, BuildFax, ina release. “Because BuildFax has the only national database of historical building permit data, we believe we have a responsibility to share our knowledge of residential remodeling with the public.”

Each monthly BFRRI release, including the first index release, will report on a one-month delay (so in mid-January, the release will be for remodeling in November 2010), and will include month-over-month as well as year-over-year comparisons for the nation and each of the four regions. Historic index values, going back to early 2004, will be available for purchase from http://index.buildfax.com/