Seasonal Remodeling Decline Arrives Early; More Severe

Residential remodeling eased off inrnAugust, dropping by 13 percent from the July seasonally adjusted annual rate ofrn3.434 million to 2.987 million.  The raternis also 5 percent below the 3.140 estimate for remodeling in August 2012rnaccording to the BuildFax Remodeling Index (BFRI) released on Monday</p

BFRI is based on construction permitsrnfor residential remodeling projects filed with local building departments and estimatesrnthe number of properties rather than projects permitted.  The BuildFax database currently covers overrn60 percent of the U.S. commercial and residential building stock with over 6rnbillion data points.</p

“The end-of-summer drop thisrnyear was both earlier and more severe than last year,” said Joe Emison,rnChief Technology Officer at BuildFax, “but overall residential remodelingrnactivity in 2013 still remains higher than it was in 2012.” </p

If the BuildFax estimates are accurate theyrndo indeed indicate an earlier slowdown in the booming remodeling market thanrnhad been predicted by LIRA (Leading Indicator of Remodeling Activity) earlierrnthis month.  That index from the HarvardrnJoint Center for Housing Studies uses a quarterly moving average for remodelingrnexpenses and had projected an increase from the second to third quarter of 10.4rnpercent and from the third to the fourth of 15.9 percent.  LIBA had seen a downturn finally occurring inrnthe second quarter of 2014.</p

Seasonally-adjusted annual rates ofrnremodeling across the country in August 2013 are estimated as follows:rnNortheast, 616,000 (down 10% from July and down 35% from August 2012); South,rn1,241,000 (down 8% from July and down 8% from August 2012); Midwest, 668,000rn(down 38% from July and up 8% from August 2012); West, 760,000 (down 3% fromrnJuly and flat from August 2012).

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