The BuildFax residential remodeling index rose to the highest level for a December since the index began in 2004 and continues to exceed levels reached during the home-equity withdrawal boom of 2004 to 2006.
The index rose 22.8% to 127.4 in December from 103.7 a year earlier. The index is down 7.6% from November when it stood at 137.9.
While the index rose considerably from December 2010, “remodeling activity slowed from November to December 2011 as it did in 2010 — an expected change seen in previous years around the holidays,” said Joe Emison, vice president of research and development at BuildFax.
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 2004:
All regions of the country posted declines in December from the prior month, as the West fell 5.3%, the Midwest declined 13.8%, the index dropped 1.3% in Northeast and 5.8% in the South.
The index rose from a year earlier by nearly 32% in the West, almost 10% in the Midwest and 5% in the South. The Northeast dropped by 3% in December 2011.
BuildFax tracks remodeling activity via building permit activity filed with local building departments across the country. Starting next month, BuildFax will release a seasonally adjusted index.
jhilley@housingwire.com
