Like most industries, there is a cyclicality to home building. When demand for new homes is strongest, opportunities for home builders increase. The remodeling industry also is subject to cycles, although its prospects are more closely tied to the broader economy, and its highs and lows tend to be less pronounced than those of the home building industry.

No matter what the real estate market or the economy at large are doing, however, franchise opportunities always abound in the construction and remodeling industries. While we have just come through a record period of new home construction and sales, and things have begun to slow down somewhat, there are still plenty of homes being built.

In September 2006, for example, housing starts rose 5.9 percent to a seasonally adjusted annual rate of 1.77 million units. However, issuance of building permits, which is considered a good indicator of future building activity, fell by 6.3 percent that month to a seasonally adjusted rate of 1.62 million units.

"Builders are reacting to current market conditions by pulling fewer new permits and instead focusing on their backlog of existing orders," said David Pressly, president of the National Association of Home Builders (NAHB).

Most franchise opportunities available in the construction and remodeling sector focus on providing specific products and services to general contractors and homeowners rather than ground-up construction of new dwellings. As such, construction and remodeling franchises have a level of built-in protection against market ups and downs.

When new construction activity slows down, many builders and contracting firms shift their focus to remodeling. Likewise, consumers who might be hesitant to buy or build a new home during a market downturn often refocus some of the resources they would have spent to remodeling projects instead. Since franchise businesses in this sector tend to serve both markets, they are generally better positioned to ride out economic shifts.

There are many different types of franchises available in the construction and remodeling industry. They run the gamut from carpentry and framing to interior design and painting to customized closets and general handyman services.

Remodeling continues to be a particularly bright spot in the overall construction picture, although it, too, has cooled a bit since hitting record high levels recently. Crossing the $200 billion threshold for the first time, residential remodeling activity hit an estimated annual rate of $210 billion in 2005, according to NAHB analysis of spending statistics from the U.S. Census Bureau.

The association projected that Americans would spend a record $238 billion on remodeling their homes in 2006, representing a 13.2 percent jump in spending over 2005 and marking the sharpest increase in more than a decade. Spending grew by 5.8 percent in 2005, in line with an average rate of 5.3 percent from 1994 to 2004, according to NAHB.

"The devastating 2005 hurricanes and a rebound in the rental market spurred the historically high increase in spending in 2006, as repair work proceeded in the Gulf states, and apartment owners renovated properties to maximize their rental income," said Vince Butler, chair of NAHB's Remodelors Council. "The massive owner equity and low refinance rates that fueled recent growth continued to drive strong expansion."

Construction and remodeling franchises have a good track record of giving back to the communities they serve. For every $100,000 spent on additions and alterations, the local community receives $54,200 in income, $4,900 in taxes and other government revenue, and more than one local full-time job, according to an analysis by NAHB economists of the local economic impact of remodeling.

"The $200 billion remodeling industry is almost exclusively made up of small businesses (many of them franchises) that operate in local communities," Butler said. "And we can now confirm that money spent on remodeling stays local."

Despite some slowdown in the overall home building industry in 2006, expectations for continued growth in remodeling projects for owner-occupied units remained strong among owners of remodeling businesses in the second half of the year, although overall expectations were down due to weakness in the outlook for renter-occupied units.

"We expected lower sentiment as the overall housing market slows, and the second-quarter (2006) numbers certainly reflect that," said Butler. "However, the remodeling market should perform relatively well as the overall housing market slows."

As NAHB chief economist Dave Seiders pointed out, "Remodeling is less volatile than new home construction, partly because nearly half of all expenditures represent non-discretionary maintenance and repair projects. "The average age of the housing stock is 32 years and rising-well past the time when major home systems need replacement. Supported by $11 trillion in homeowner equity, the fundamentals of the remodeling market will remain strong for the foreseeable future."

One area where a number of new franchise opportunities have become available in the building and remodeling sector is in concrete and cement services. Concrete and cement are widely used in both new construction and remodeling, and many new applications for this versatile building material have been developed in recent years.

According to NAHB research, 19 percent of all new single-family homes use cement stucco siding, 13 percent use fiber cement siding, and 2 percent use manufactured stone, which is most often made from cement.

Some 60 percent of new driveways are made of poured concrete, and the average new home uses some 19 tons of concrete and cement for basements, crawl spaces, foundation walls, floors, footings, slabs, above-grade walls, fireplaces, hearths, chimneys, landscaping, paving and decorative uses.

Some of the most innovative uses in the concrete and cement industry are to be found in the area of decorative and other nontraditional applications. With today's new technologies, concrete can be made to resemble anything from polished marble to antique brass. Excellent franchise opportunities can also be found in more traditional segments of the industry, such as crack repair, concrete resurfacing and waterproofing.

Like other businesses in this sector, concrete services businesses find a particularly strong market among homeowners undertaking remodeling projects, and there are many positive trends there that should bode well for the industry.

The remodeling market is well positioned for healthy growth over the next few years, with the Census Bureau and NAHB projecting spending to grow by about $100 billion over the next five years. Among the factors driving that growth are:

More than 80 percent of the homes sold last year were existing rather than new, making them good candidates for remodeling and decorating projects.

Even when the rate of new home building moderates, the total number of homes continues to grow because existing units are not removed from the marketplace as fast as new ones are created.

Many owners, even of relatively young homes, view their homes as functionally obsolete, especially in terms of their kitchens and bathrooms.

The median age of a home in the U.S. is 32 years, meaning half of all homes were younger and half older than 32. That median age is projected to continue to increase.

For the past century, the size of new single-family homes has been increasing steadily. Most new homes built today are more than 2,700 square feet in total size, up from about 1,600 square feet in 1980 and 1,400 square feet in 1970.

Growth in the remodeling and construction industry will continue to be fueled by a number of those trends. Increases in the total number of housing units translate to a direct increase in the size of the potential marketplace for remodeling and repairs. A housing stock that is getting older also means greater demand for regular maintenance and repairs, such as painting, roof replacement and concrete repair.

At the same time, owners of older homes are often interested in modernizing them by adding some of the amenities found in newer houses. For example, the owner of a 20-year-old 1,400-square-foot home might want to add a bigger kitchen, additional bathrooms, a new family room or a master bedroom suite.

Those are the types of features that many of today's larger new homes boast. Over the past 25 years, the percentage of new homes built with more than two bathrooms, at least one fireplace, and a two-car or larger garage has been rising dramatically.

Owners of older homes often have a great deal of equity in them. Many find it more appealing to tap that equity to add such amenities to their existing home rather than trying to sell and move to a new home.

When the owner of an older home undertakes a major remodeling or addition project, it's not unusual for many other homeowners in the same neighborhood to follow suit, says a regional vice president of the National Association of Realtors (NAR).

Part of the reason for that "follow the leader" phenomenon in remodeling is that owners want to protect the value of their properties. "If every house in the area has two full baths or an eat-in kitchen and yours doesn't, that can be a real obstacle when it's time to sell," the NAR executive says. Psychology also comes into play.

Keeping up with the Jones' is almost as much of an American tradition as apple pie and the Fourth of July. The thought of adding a backyard swimming pool may never have occurred to one homeowner, but when he sees how much a neighbor is enjoying his, he decides it may be a good idea.

NAH's analysis of the consumer expenditure data demonstrates that the percentage of homeowners who remodel their homes increases with the age of the head of household and with combined household income.

That means older, two-income families-a description that fits the massive population bulge of baby boomers as they move into middle age and beyond-are more likely than the average consumer to spend money on remodeling their homes.

The two times when homeowners are most likely to undertake remodeling and repair projects are when they are preparing to put their homes up for sale and immediately after moving into a new home. Substantial home improvements, such as major kitchen and bathroom remodels or room additions, are most often undertaken during the first three years of ownership.

Very often, these turn out to be big-ticket projects. It is not unusual for a homeowner to spend $15,000 or more upgrading and expanding a kitchen in a "minor" remodel. The cost for a "major" remodel can be double or even triple that.

Real estate specialists say some of the most popular home improvement projects are state-of-the-art kitchens and bathrooms, family rooms, master bedroom suites that incorporate baths and walk-in closets, decks and extra bedrooms for the "baby boomlet." One improvement that is beginning to gain in popularity is the high-tech media room,wired for big-screen TV, broadband Internet access and multi-speaker sound systems.

Growth in the 55-plus population is expected to be a major driver of demand for construction and remodeling services in the coming years. Americans aged 55 and older will head 40 percent of all households by 2012, according to new research from NAHB's 50+ Housing Council.

"There is no question that the 55-plus segment is a large and growing share of the housing market," said Paul Emrath, a housing policy analyst for NAHB. The council's latest research findings, based on the American Housing Survey, have major implications for the nation's housing industry in the decade ahead, he added.

The council's research found that most 55-plus households (there are more than 26 million of them already) are not residing in age-qualified or other senior-oriented communities but in regular housing. About 75 percent of people over age 45 are homeowners, and most 55-plus households report being happy with their current homes.

All that adds up to increasing demand for new homes designed to make it easier for people to age in place, said Norman Cohen, chairman of the 50+ Housing Council. Older people who don't want to move will turn to remodelers to make modifications to their existing homes so their various needs can be accommodated as they age.

According to the latest Remodeling Market Index, 75 percent of professional remodelers surveyed said that they have observed an increase in the number of requests for aging-in-place modifications. Common modifications include step-less entries, replacing doorknobs with lever handles, low- or no-maintenance exteriors, open floor plans and improved lighting design.

Of course, the most obvious external improvement a homeowner can do is the addition of a room or wing, and this is one area that is fraught with pitfalls. The basic rule that real estate pros offer is, "Don't do an addition if that's what it will look like.

"In order to enhance the value of the property, an addition must look as if were part of the original design of the house ."Anything that creates a dysfunctional floor plan or fails to maintain the architectural integrity of the original structure will be viewed negatively by an appraiser," warns a senior vice president and appraisal division manager for a regional West Coast bank.

As a group, today's homeowners are generally aware of the importance of quality, professionally done improvements. Many are two-income couples who do not have the time, ability or inclination to undertake such projects themselves. As a result, demand for professional remodeling, repair, home maintenance and construction services is booming.

Naturally, performing quality work in this field requires a certain amount of training and skill. However, even those with no previous experience in the building trades can tap into this burgeoning field of opportunity through franchising.