Remodeling spending will outpace single family home construction in 2012, as homeowners embark on a home remodeling spending spree, say figures from BuildFax, Harvard and IHS Global.
Consumers are tired of waiting to remodel. say analysts. Though their home equity may have dropped, or even turned negative, homeowners also believe they are unlikely to be able to sell and move, and so are making the situation: fixing up their residence while staying in place.
Remodeling expenditures will rise 5.7 percent in 2012 to $160 billion, IHS Global Insight told the Wall St. Journal. Its figures include both interior and exterior work, as well as do-it-yourself and professional custom home interior work -from closets to cabinets.
The momentum has been building throughout 2011. IHS Global says 2011 figures for remodeling should come in at 3.3 percent gain, to $152.4 billion.
BuildFax says remodeling rose 33.5 percent in November 2011 versus November 2010, based on construction permits filed with local building departments across the country.
Harvard University's Joint Center for Housing Studies says remodeling expenditures are expected to increase at an inflation-adjusted 3.5 percent average annual rate - below the pace during the housing boom, but sharply recovering from the recent downturn. Its report,, "A New Decade of Growth for Remodeling," was published by the Remodeling Futures Program at the Joint Center last week.
“As both the economy and the housing market stabilize, so too will homeowner improvement spending,” says Abbe Will, a researcher with the Remodeling Futures Program.
The Residential BuildFax Remodeling Index, based on a survey of building permits issued across the country, rose 33.5% year-over-year in November 2011, BuildFax says. Now standing at 137.9, the index's pace of increase has been accelerating for 25 months. BuildFax national and regional indexes use a baseline of 100 set in April of 2004, and are based on a three-month moving average, and are not seasonally adjusted.
"Residential remodeling in 2011 grew substantially above 2010 rates and remained strong through the end of the year," said Joe Emison, VP 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."
Regionally, remodeling showed the greatest gains for November 2011 (versus 2010) in the West (43.7 points; 43%), the Midwest (14 points; 13.1%) and the South (8.9 points; 10.6%).
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