Did you know that May is National Remodeling Month? Since the downturn in new residential construction that began in 2007, the media has been focusing on the number of new starts as the key indicator of the health of the residential construction industry. But focusing on the number of starts ignores an increasingly important component of residential construction – remodeling.
Not only is May National Remodeling Month but, according to David Crowe, Chief Economist for the National Association of Home Builders, depending upon how you measure it, remodeling has taken over first place in total residential construction expenditures.
There are two measures of remodeling activity. The U.S. Census Bureau measure or residential construction spending only counts improvements to owner-occupied homes. In January 2010, that component accounted for 48% of all residential construction spending. Prior to the recent mid-decade construction boom, improvements to owner-occupied homes accounted for approximately 25% of all new-residential construction spending. During the boom, it fell to 21%. But improvements to owner-occupied homes have exceeded new-single family construction value since February 2009.
The U.S. Department of Commerce’s Bureau of Economic Analysis which measures the U.S. Gross Domestic Product includes within its residential construction spending accounts for residential remodeling of rental, vacant, and second homes in addition to owner-occupied homes. In 2008, this broader measure of residential improvement expenditures accounted for 42% of all residential construction, In 2009, it is expected to top 50%. Prior to the mid-decade construction boom, this broader measure of residential improvement expenditures averaged around 30% of all residential construction spending. It fell to 25%. But improvements to owner-occupied homes have exceeded new-single family construction value since February 2009.
Professional remodeling activities are concentrated in the 85 million homes that are 25 years old and older. About one-fifth of the owners of these homes spent and average of $11,400 on professional remodeling in 2007.
There are two primary drivers – the energy tax credits and the Baby-Boomers who are choosing to remain in their existing homes.
Improvement to increase the energy-efficiency of your home and remodeling for Aging-in-Place to allow you to live in your home independently regardless of age or ability are two of our specialties. To learn more, visit our website www.chuckmillerconstruction.com.
Chuck Miller GMB CGB CGP MIRM CMP MCSP CSP
President / Builder – Chuck Miller Construction Inc.
(208) 229-2553 (208) 571-0755