Real estate data shows that as more current borrowers choose to stay in their homes, the rate of residential remodeling surged at the beginning of 2012.
According to a recent report from BuildFax, remodeling activity rose 11 percent in January on an annual basis, growing to an estimated 3 million projects. The previous month, there were roughly 2.65 million remodelling projects underway, representing a 13 percent difference.
"Residential remodeling this winter is as strong as it has been in more than five years. We expect residential remodeling to continue to grow throughout 2012," said BuildFax vice president of research and development Joe Emison.
Experts believe that the rise in remodelling is typical for a depressed economy, as the average projects cost $10,000. In contrast, it costs an average of $184,000 to build a new home.
This difference in expense, could be accountable for a low rate of new home sales, as well as continuously weak builder confidence. According to the National Association of Home Builders, builder confidence hovered at a reported index of 28 out of 100 this month. However, despite the weak overall index, the confidence level had seen improvements for five consecutive months ending in February.