by Calculated Risk on 4/16/2012 12:24:00 PM

From BuildFax:

Residential remodels authorized by building permits in the United States in February were at a seasonally-adjusted annual rate of 2,894,000. This is 3 percent above the revised January rate of 2,811,000 and is 23 percent above the February 2011 estimate of 2,362,000.

"February 2012 is the first month over the past twelve to show significant increases in residential remodeling activity across all U.S. regions," said Joe Emison, Vice President of Research and Development at BuildFax.

The BuildFax Remodeling Index (BFRI) is based on construction permits for residential remodeling projects filed with local building departments across the country. The index estimates the number of properties permitted. The national and regional indexes are based upon a subset of representative building departments in the U.S. and population estimates from the U.S. Census. The BFRI is seasonally-adjusted using the X12 procedure.

Click on graph for larger image.

This graph shows the Remodeling Index since January 2000 on a seasonally adjusted basis.

Remodeling is below the peak levels of the housing boom - with all the equity extraction - but up 25% from the bottom in May 2009.

Note: Permits are not adjusted by value, so this 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.

The second graph shows the regional indexes. From BuildFax:

Seasonally-adjusted annual rates of remodeling across the country in February 2012 are estimated as follows: Northeast, 627,000 (up 24% from January and up 33% from February 2011); South, 1,194,000 (up 3% from January and up 25% from February 2011); Midwest, 516,000 (up 4% from January and up 22% from February 2011); West, 830,000 (up 9% from January and up 21% from February 2011).

Some of the increase in February could be weather related (the index is seasonally adjusted, and the weather in February was warmer than normal). This might especially be true in the Northeast.

For overall residential investment, multi-family construction and home improvement have already picked up, and it appears single family construction will increase in 2012.