The May BuildFax Housing Health Report (BHHR) revealed that even as economic pressures are easing on a national level, for instance moderating home prices and declining mortgage rates, the housing market is still in a slump. Year over year, single-family housing authorizations, maintenance and remodeling are down. However, BuildFax found that increases in city-level remodeling activity suggest some metros are still seeing investment into the existing housing supply.
New and Existing Housing Supply
Single-family housing authorizations increased slightly month over month, however, the trailing three-month outlook suggests single-family housing authorizations are still in a steady decline, reinforcing the continuation of the 2019 housing slowdown. Meanwhile, maintenance spend also increased, even as maintenance volumes dipped, suggesting external pressures from the impact of recent tariffs on building materials.
New and Existing Housing Supply Activity, May 2019
- Single-family housing authorizations decreased 3.50% year over year.
- Existing housing maintenance volume decreased 1.01% year over year.
- Existing housing remodel volume decreased 3.94% year over year.
Remodeling Activity Increases in Five Major Metros
Philadelphia and Chicago saw the most notable increases in remodeling activity across the ten largest metropolitan statistical areas. Philadelphia and Chicago remodeling activity rose 10.20% and 5.06% year over year on a 12-month trailing basis. The Philadelphia metro in particular has resisted national trends. From October to December 2018, when the rest of the United States experienced declines in housing activity, Philadelphia beat records for the number of homes sold. Remodeling activity in three other metros, Los Angeles, Miami and Washington D.C. also increased.
See the full analysis here.
“After several years of above-average growth, the residential remodeling market may be reaching a turning point,” said Abbe Will, Remodeling Futures Associate Project Director at the Harvard Joint Center for Housing Studies. “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. 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 insight on the health of the U.S. housing market and which markets are still seeing positive city-level remodeling activity, download the May 2019 report.