In May, housing activity significantly increased, year over year, across all major indicators. Despite strong growth, intense housing supply shortages and sky-high prices still plague the market and pushed homebuyer sentiment to records lows in May. Although single-family housing authorizations are up 25.88%, year over year, housing starts are lagging new construction permits, prolonging inventory shortages.
New and Existing Housing Supply Activity, May 2021, Year Over Year
- Single-family housing authorizations increased 25.88%.
- Existing housing maintenance volume grew 30.53%.
- Existing housing remodel volume increased 29.06%.
Remodeling activity provides a view into the overall health of the U.S. housing stock and can help identify areas disposed to housing market growth or decline. On a 12-month rolling basis, remodeling activity—which encompasses large-scale projects including additions, accessory dwelling units, and pools—increased across almost all major metro areas, year over year.
Philadelphia and Chicago experienced the greatest increases in year-over-year remodeling activity, rising 85.54% and 40.43%, respectively, on a 12-month trailing basis. In the same timeframe, only two cities—Dallas and Los Angeles—trended downward, decreasing 5.98% and 5.58%, respectively.
Remodeling often indicates homeowners are prepping their properties for resale. However, it may also be the result of homeowners investing in their homes because they feel stuck in a highly competitive housing market, or after refinancing their mortgage while rates are low. In this case, homeowners may be focusing on home improvements to maximize and improve their livable space in lieu of re-entering a feverish housing market.
Download the report for an in-depth view of the health of the U.S. housing stock in May.