Remodeling Activity Reaches Record Levels; Builder Confidence RisesOctober 18th, 2011 | Category: Industry News
Remodeling activity reached a record high during August according to the latest BuildFax Remodeling Index (BFRI) released today. BuildFax also reported that, based on its national footprint of permit data, an estimate of more than 3.3 million residential remodeling projects will be permitted in 2011. This figure is up from the estimated 3.1 million residential remodeling projects that were permitted in 2010, an almost 9.5-percent increase.
“As mortgage rates hit record lows, it is apparent that millions of Americans are refinancing their homes and using some of their new monthly savings to reinvest in their homes with remodeling projects,” says Joe Emison, vice president of research and development at BuildFax. “With remodeling activity growing at an estimated 9.5 percent in 2011 compared to 2010, this is one segment of the economy that is showing continued strength, even as other sectors struggle.”
Meanwhile today, the National Association of Home Builders (NAHB) reported that home builder confidence rose four points in October according to the NAHB/Wells Fargo Housing Market Index (HMI) for October. This is the largest one-month gain the index has seen since the home buyer tax credit program helped spur the market in April of 2010.
“This latest boost in builder confidence is a good sign that some pockets of recovery are starting to emerge across the country as extremely favorable interest rates and prices catch consumers’ attention,” says NAHB chief economist David Crowe. “However, it’s worth noting that while some builders have shifted their assessment of market conditions from ‘poor’ to ‘fair,’ relatively few have shifted their assessments from ‘fair’ to ‘good.’ One reason is that builders are facing downward pricing pressures from foreclosed homes at the same time that building materials costs are rising, and this is further squeezing already tight margins.”