Analysis: BuildFax May housing health report reveals five metros with rising remodeling activity
Philadelphia and Chicago experience largest increases in remodeling.
The BuildFax Housing Health Report revealed a modest increase in month-over-month single-family housing authorizations; however, the trailing three-month view decreased 4.76%, marking six months of steady decreases. This is in stark contrast to May 2018, when the trailing three-month outlook increased 7.78%.
The report, which leverages U.S. property condition and history data to deliver macro- and microeconomic trends, includes a special section highlighting the major metros experiencing increased remodeling activity during spring home-buying season, which winds down in June.
Housing Supply by Volume
- Single-family housing authorizations decreased by 3.50% year over year.
- Existing housing maintenance volume decreased by 1.01% year over year.
- Existing housing remodel volume decreased by 3.94% year over year.
“The combination of declining mortgage rates, moderating home prices and peak home-buying season should help to buoy the housing market, but so far this hasn’t happened,” said BuildFax COO Jonathan Kanarek. “Continued declines in year over year maintenance and single-family housing authorizations further reinforce the ongoing housing slowdown. As we near six months of declining activity, the question remains, how long will this slump persist?”
Remodeling Activity Increases in Five Major Metros
Five of the largest metropolitan statistical areas experienced increases in remodeling activity. Philadelphia and Chicago experienced the largest increases in remodeling activity at 15.20% and 5.06% respectively. In some metros, remodeling activity is driven by increased domestic migration to the region, while in others, rising home prices have propelled homeowners to re-invest in their existing home instead of re-entering the housing market.
“After several years of above-average growth, the residential remodeling market may be reaching a turning point. Nationwide slowdowns in house price gains, home sales activity, and building material sales are lowering our expectations for further increases in home improvement and repair spending in 2019,” said Abbe Will, Remodeling Futures Associate Project Director at the Harvard Joint Center For Housing Studies.
“However, metro housing markets that have yet to fully recover from the 2009 economic downturn provide untapped potential for further growth, despite the broader deceleration we’re seeing nationally.”
For more trends affecting the U.S. housing market, access the full report here. To learn more about BuildFax, visit www.buildfax.com.
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