As the housing industry continues to weigh the economic recovery, experts anticipate its remodeling sector will buck the trend and takeoff this year as homeowners start spending on upgrades and renovations.
Business reporters can gauge how their local remodeling market is recovering by turning to three key industry indices, finding the right industry experts, and checking in with both local remodeling retail shop owners and homeowners on local trends.
The best way to delve into the research is to look at your localized information from one of the indices. The National Association of Home Builders provides a quarterly Remodeling Market Index (RMI) that measures the remodeling market by gauging demand based on surveys of thousands remodelers in the U.S. The RMI is broken down into two indices – one that measures current activity and one that predicts future trends. Its survey questions focus mainly on the demand for major and minor additions and repairs and the amount of work remodelers have committed to them.
The NAHB’s index offers region-specific data that could be helpful in identifying unique trends in your area. For example, reporters in the Midwest will see that their region was the only region that experienced a decline in remodeling so far this year, according to 2011 first quarter RMI. The NAHB’s first-quarter survey also includes special questions on what would be keeping homeowners from remodeling – don’t miss that data.
Another telling remodeling industry index is Buildfax’s monthly Buildfax Residential Remodeling Index (BFRRI), once-private research that was launched for public use in January. It also provides regional information, but unlike NAHB’s RMI, the Buildfax index measures remodeling by tallying building permits for remodeling projects. It should give reporters a good sense of trends in larger additions and bigger-ticket remodeling spending.
Finally, a third remodeling index is the Leading Indicator of Remodeling Activity (LIRA), a quarterly measurement from Harvard’s Joint Center for Housing Studies’ Remodeling Futures Program, which factors in a wide variety of data. The index, which will next be released July 21, accounts for consumer intentions and housing market activity. LIRA’s most recent data anticipates a significant boom in the remodeling industry during the spring season this year, traditionally the most busy time for the industry.
If remodeling is indeed rebounding in your area, find out what’s driving it. Is it an aging population retrofitting their homes for old age? Is it a demand for eco-friendly projects like energy efficienct upgrades? Are more people having trouble selling their homes so choosing to renovate instead? Those are good questions to pose remodelers or homeowners in your area.
In an economy where housing prices and home sales have slumped so severely, many homeowners trying to sell their homes may be investing in remodeling. One often-overlooked question by business journalists covering the housing and remodeling markets: Is investing in remodeling to sell your home still worth it?
At least one source – Remodeling magazine - says remodeling has not been paying off this year as well as it did last year for homeowners investing in projects. Ask your state or region’s chapter of the National Association of the Remodeling Industry, local Realtors, homeowners and home buyers what’s true in your area. Exploring the impact of remodeling’ return on investment could lead to a whole new angle on the topic.
- Spending on remodeling is typically two-fifths of the total spending in the housing market.
- The remodeling industry is a roughly $280 billion-per-year industry, which accounts for about 2 percent of the U.S. economy.
- About 40 percent of all spending on housing construction is spent on remodeling.
- The remodeling industry peaked in 2007, after the housing bubble burst but before the broader economic recession. The remodeling market fell by about 12 percent from 2007 to 2009.
Sources: the National Association of Home Builders, Joint Center for Housing Studies
A few expert sources
- Paul Zuch, president of the National Association of the Remodeling Industry.
- Joe Masters Emison, vice president of research and development at Buildfax. Press contact: Glenn Mandel, Red Fan Communications, email@example.com.
- Kermit Baker, director of the Remodeling Futures Program, Joint Center for Housing Studies. Media contact: Kerry Donahue, firstname.lastname@example.org.