IBS Report: Residential building on upswing, remodeling improving

“We created the improving markets list in September of 2011 to spotlight individual metros where – contrary to the national headlines – housing markets were on the mend,” noted NAHB Chairman Barry Rutenberg, a home builder from Gainesville, FL. “Today, 242 out of 361 metros nationwide appear on that list, including representatives from almost every state in the country. The story is no longer about exceptions to the rule, but about the growing breadth of the housing recovery even as overly strict mortgage requirements hold back the pace of improvement.”

A joint report released by the Window & Door Manufacturers Association (WDMA) and the American Architectural Manufacturers Association (AAMA) said that new residential construction activity for 2012 is expected to close at 818,000 units, a 23.9% improvement as compared to 2011 and slightly better than forecasted last August. Most of this improvement over earlier forecasts is attributed to multi-family starts. The study forecasts similar improvements for 2013, and continues to predict an even stronger 31% new residential construction improvement for 2014 over 2013. Existing home sales are expected to end at 4.7 million units in 2012, slightly better than originally forecast.

Also trending up is the home improvement business. The NAHB reported at its press conference at the IBS, that residential remodeling will slowly and steadily improve in 2013. Remodelers at the IBS, speaking on the panel at the press conference, agreed with the NAHB’s latest economic forecast, citing increased demand from home owners for kitchen and bath renovations and repairs.

The NAHB projects that remodeling spending for owner-occupied single-family homes will increase 2.4% in 2013 over 2012, and another 1.7% in 2014. Another figure than might be driving this increased spending on remodeling is a survey that shows that the average U.S. homeowner of a single-family home is staying in their home an average of 13 years, which is three years less than in 2011 and seven years less than in 2009. Typically people will do some remodeling prior to selling their home, which might be driving up remodeling.

“We are more confident about the remodeling market’s future coming off a strong year of residential remodeling growth, though the post-recession industry is still restrained by the amount of time it takes to convert leads to sales,” said 2013 NAHB Remodelers Chairman Bill Shaw, a remodeler from Houston. “Our remodeler members are regaining confidence in the market as home owners move forward with projects that they put off in years past.”