The BuildZoom And Urban Economics Lab Index: 2 Q 2015

by Jackson Cookson, BuildZoom

Remodeling of existing homes has fully recovered since the housing bust, and is 2.8% above its 2005 level. In contrast, new home construction is recovering gradually and remains 57.0% below its 2005 level.

However, year-over-year, residential new construction increased by 18.7%, while residential remodeling remained at the same level as a year ago.

The BuildZoom & Urban Economics Lab Index has added 3 new metro-level indexes: New York, Los Angeles and Las Vegas.

The New York and San Jose metro areas stand out for having relatively strong recoveries of both new home construction and existing home remodeling, both of which are well above the national average.

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National Indices for New Home Construction and Existing Home Remodeling

(Seasonally adjusted)

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National

Metropolitan Area Indices

The following tables and graphs present seasonally-adjusted indices of an initial selection of metropolitan areas.

Metropolitan Area Indices of Permitting for New Home Construction

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Metro ResNew

Metropolitan Area of Permitting for Existing Home Remodeling

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Index_Chicago-Naperville-Elgin, IL-IN-WI Metro Area

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What is the BuildZoom & Urban Economics Lab Index and why is remodeling important?

The remodeling of existing homes is an indicator of economic health whose importance is on par with new home construction. The size of the remodeling market is about $300 billion a year, not far from the $340 billion value of residential construction put in place last year.1 Unlike new construction, which captures the outlook of homebuilders, remodeling more directly captures consumer confidence. Moreover, new construction paints a picture of the economy that is skewed towards conditions in high-growth metropolitan areas – and on their outermost fringe at that – whereas remodeling reflects the state of the economy across a more evenly distributed geography, which better represents the nation as a whole.