Remodeling Surges; Many Homes Now Under-Insured
Home sales may be stagnant but,rnaccording to data released on Monday by Buildfax, homeowners are increasinglyrnupgrading the homes they already have. rnThe company, which maintains a nationwide building and permitting datarnbase, said that remodeling activity reached a record high in July as consumersrnput more discretionary income into their homes. rnThis has also increased the number of under-insured properties to recordrnhighs.</p
The BuildFax Remodeling Index (BFRI) forrnJuly indicates that residential remodeling activity registered the 21st</supstraight month of year-over-year gains indicating, the BFRI report says, thatrnconsumers are continuing to remodeling rather than purchase new homes and do sorneven as fears of a double-dip recession grow and unemployment remains above 9rnpercent. </p
The July index was up 24 percent fromrnone year ago and, at 130.4 is the highest number since the index began inrn2004. The index was up in all regions,rnrising 26 percent in the Western region, 5.6 percent in the Midwest, 7 percentrnin the South and 0.7 percent in the Northeast. rnThe West and Midwest were also higher than in the previous month (3rnpercent and 5 percent respectively) while both the Northeast and South saw month-over-monthrndeclines of slightly more than 3 percent.</p
At the same time that there has been anrnupswing in the sales of materials and the numbers of renovations exceedingrn$10,000 there is an indication that homeowners have not increased the insurancernon their homes to reflect the new, true value of the structure.</p
“As millions of Americans believe that they will not be able to securerna new home due to a variety of factors including tight credit, limited buyersrnand challenging job prospects, they are more and more turning to renovating andrnremodeling their current properties, sending remodeling activity to recordrnlevels,” said Joe Emison, Vice President of Research and Development atrnBuildFax. “However, this remodeling boom is leaving many of thesernproperties under-insured, as the value of these renovations are often not beingrncaptured by the homeowners’ insurance companies.”
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