New Building, Remodeling Constrained by Credit

The National Association of Home Builders (NAHB) national convention will hear a speech from Fed chairman Ben Bernanke today on the US housing market. Bernanke is very likely to repeat his general comments that the Fed should do more to kick-start a housing recovery.

For its part, the NAHB sees an uptick in new construction of multi-family buildings:

The apartment sector is a bright spot in the overall housing market … we are forecasting construction of 208,000 multifamily residences in 2012.

The industry also sees an increase in remodeling, which rose to a five-year high in December:

Spending on improvements to owner-occupied housing is nearly equal to that of new residential construction. NAHB predicts that residential remodeling will rise 8.9 percent in 2012.”

There’s a catch though: financing. Both new construction and remodeling projects require access to credit, which still remains limited. Remodeling projects face the additional constraints of homeowner fears for adding to equity losses and low property appraisals.