May 2010 Press & Charter
Remodeling Market Finally Turning Upward
Remodeling Market Finally Turning Upward
Key indicator shows first positive growth since 2006
Source: REMODELING Information Service, By Leah Thayer
For the first time since 2006, home improvement spending is on the upswing. Annual growth will be nearly 5% in 2010, and all signs suggest that the positive trend will continue in 2011, according to the latest Leading Indicator of Remodeling Activity (LIRA), released today by the Remodeling Futures Program at Harvard University's Joint Center for Housing Studies.
"Like everyone else, we've been waiting for the market to turn," Kermit Baker, director of the Harvard program, remarked in a recent interview. "The only modest surprise is how steep the uptick is," particularly as spending in the fourth quarter of this year is expected to move into positive territory, with growth continuing in 2011.
Conducted quarterly, the LIRA is comprised of eight data points that affect home improvement spending. These include shipments of building materials (date comes from the Census Bureau), the Pending Home Sales Index (National Association of Realtors), the Remodeling Market Index (future business expectations, National Association of Home Builders), and the 30-year Treasury Bond yield (Federal Reserve Board).
Home improvement spending is defined is major remodeling expenditures, such as renovating a kitchen or bath. It doesn't include routine maintenance, nor does it count expenditures by landlords on their rental housing.
Of all these indicators, the leading mover for the latest LIRA is pending home sales, which Baker said are "moving very strongly." The Remodeling Market Index provides a significant lift as well, especially since it was "very depressed for such a long period." Baker also cited recent low interest rates, but noted that rates are beginning to climb again.
Major problems in the housing industry remain, Baker said, especially the massive inventory of homes for sale. The potential upside for remodelers is that "many of these homes will need to be fixed up before they can be sold."
He also pointed to continued volatility in the materials market, such as metals and lumber. "The market has been weak for so long that it probably shuttered a lot [of materials production], and it takes a while to get the capacity back up," Baker said. "If demand comes on faster than manufacturers expect, there could be another round of materials inflation. That would be quite ironic."
EPA Lead Rule In Brief
NLBMDA Effective April 22, 2010
Requirements for Renovation Contractors
Certification and Training Requirements
Company Certification: All firms performing renovation, repair or painting work on homes constructed prior to 1978 must become certified by the EPA. This can be accomplished by applying to EPA or to the State, if it has an EPA-authorized renovation program, and paying a fee.
Individual Certification: In addition, firms must have one or more "Certified Renovators" assigned to jobs where lead-based paint is disturbed. To become certified, a renovator must successfully complete an EPA or State-approved training course conducted by an EPA or State-accredited training provider.
Training: All renovation workers must be trained. Renovation workers can be trained on-the-job by a Certified Renovator to use lead safe work practices, or they can become Certified Renovators themselves.
Firms Engaged in Renovation Work
Dealers and contractors engaged in renovation work on homes constructed prior to 1978 that are not yet certified and do not have certified renovators are encouraged to start the process for securing both as soon as possible. Certification of firms currently takes EPA six weeks or more to process and approve.
Please click here to view the full EPA brochure, "Steps to Lead Safe Renovation, Repair and Painting."
EPA Announces Expansion of New Lead Renovation, Repair and Painting Rule
NAHB Nation's Building News
The U.S. Environmental Protection Agency has announced that its new Lead: Renovation, Repair and Painting rule will apply to all homes built before 1978. The agency is eliminating an “opt-out” provision that largely limited the regulation’s applicability to older homes that were the residences of pregnant women or children under six years old.
Expected to be enforced starting in July, the new mandate will increase the number of homes covered by the lead rules from an estimated 9.4 million to about 79 million, even though the EPA itself estimates that a significantly smaller number of homes — about 38 million — still contain lead paint.
The agency also gave notice that it is writing an additional rule to require more complex dust-wipe or clearance testing, effectively requiring remodelers to fill the role of lead-paint abatement workers. If approved, this rule would become effective in July 2011.
The announcement was made on Earth Day, April 22, the day before the new lead-based paint training and certification requirements for remodelers went into effect.
The rule requires remodelers and all other contractors disturbing more than six square feet of painted surfaces in pre-1978 homes to attend the required training and submit firm certification. It also dictates lead-safe work practices, pre-renovation consumer education and record keeping practices.
NAHB fought hard to delay the certification rule, citing a lack of trainers, ineffective lead-based paint test kits, long delays in the firm certification process and other issues related to a general lack of preparedness for the rule’s implementation.
Now that the rule is law, NAHB is recommending that its members avoid all work in pre-1978 homes unless they have completed their training and certification requirements. Members can click here to find a list of EPA-accredited trainers.
The EPA said that the opt-out provision could result in insufficient protection for children under age six and pregnant women who might move into a targeted pre-1978 home that had been renovated without following the new work procedures. Eliminating the ability to opt out, it said, will result in “fewer homes being purchased with lead hazards created by renovation, repair and painting activities.”
In addition, removing the opt-out provision provides “protection for family pets, as lead poisonings resulting from renovations have been documented in both cats and dogs,” the EPA said.
The agency said it was working on providing NAHB members with clarification on how the rule applies to homes under construction before 1978 but not completed until after that time, when lead paint was no longer allowed.
In addition to removing the opt-out provision, the rules set to take effect in July will require remodelers to give any records to their customers within 30 days of completing the job, including a checklist confirming that they followed the required lead-safe work practice steps.
The EPA also announced it will soon propose expanding the rule to public and commercial buildings.
NAHB is hosting a lead rule webinar free for members on Thursday, May 20, at 2:00 p.m. to answer questions about removal of the opt-out provision and to offer remodelers guidance on managing other requirements of the rule.
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