The housing slump and credit crunch have taken a toll on the home-improvement market, and some local residents are postponing or forgoing renovation projects because of a lack of funds or an inability to obtain financing or sell their homes.

The number of permits issued for residential remodeling, alteration or addition projects declined last year in a variety of cities and counties across the region, according to building records and data reviewed by the JournalNews.

Some home-improvement businesses have also seen their earnings fall.

Industry experts said the declines are likely attributable to persistently high unemployment, tight family budgets, stricter underwriting requirements for bank loans, shrinking home equity and the weak housing market.

“Housing values have dropped pretty dramatically, so you have to question the value of putting a fair amount of money into your home if it’s not going to be reflected in a higher value or a higher sale price,” said Vincent Squillace, executive vice president of the Ohio Home Builders Association. “The economics just don’t work in favor of remodeling like it once did.”

Permits issued for remodeling, alteration and addition projects fell last year in Butler and Warren counties.

In Hamilton, the number of permits issued for residential alterations and remodels have dropped significantly over the last two years (184 in 2010; 117 in 2011) since its 2009 figure of 346.

“Just the economy in general,” said Ken Rivera, a city of Hamilton construction administrator. “Obviously there are fewer with jobs, fewer people with income, and they have less to spend on anything. People don’t have jobs, how are they supposed to save money for anything?”

For the month of January, Hamilton issued 11 permits, which on pace would eclipse last year’s total.

“There’s no where to go but up at this point,” Rivera said. “I think that when it starts to go up, it will be a gradual incline. I don’t think we’ll see what we saw a few years ago.”

For the city of Middletown, the number of permits issued for residential additions or alterations dropped from 206 in 2010 to 135 in 2011.

Pete Lindsey, a zoning inspector/senior engineering technician for Middletown, said the city has already seen an increase in permits six weeks into the new year.

“I think you’re seeing the difference in the economy — the ease of getting loans,” Lindsey said. “I’m confident it will continue, unless there’s a major downturn in the economy.”

Squillace said declining home values means consumers are having more difficulty acquiring home equity loans because they often owe more on their properties than they are worth.

Squillace said also that consumers are postponing home repairs because family budgets are stretched thin. He said many home-improvement projects today are performed out of necessity instead of lifestyle changes, such as wanting a den or more space.

“The remodelers have seen the slowdown just as the builders have,” he said.

Widespread foreclosure activity, bankruptcies and credit card debt means consumers have lower credit ratings and banks have adopted higher underwriting requirements, said Peter Price, president of the Miami Valley Chapter of the National Association of the Remodeling Industry.

Consumers are also deferring major financial decisions, such as sinking money into their homes, until there is less economic uncertainty, Price said.

He said “big-ticket” remodeling projects today are typically along the lines of furnace replacements. He said not many people are adding rooms and making major upgrades.

Some consumers are simply buying new electronics and appliances to improve their living situations. Others are performing more basic work that does not require permits.

Sales at home-improvement retailers have not been immune to the economy and housing market.

Lowe’s watched earnings fall 44 percent in the 3rd quarter. The company announced last year it was going to close 27 stores.

Home Depot saw profits rise 12 percent in the 3rd quarter of 2011, but analysts noted the company benefitted from people preparing for and cleaning up after Hurricane Irene.

The Joint Center for Housing Studies of Harvard University’s Leading Indicator of Remodeling Activity projects a modest decline in spending on remodeling in the next two quarters of 2012, according to the National Association of the Remodeling Industry.

“Absent a more sustained upturn in the broader housing market, particularly in the sales of existing homes, there’s not much to propel growth in home improvement spending,” said Kermit Baker, director of the Remodeling Futures Program at the Joint Center, in a prepared statement. “Homeowners are continuing to undertake smaller jobs, but are still nervous about larger discretionary projects

Consumers no longer view remodeling or adding onto their homes as great investments, like they did when property values were appreciating, Price said.

He said people have stopped treating their homes as piggy banks, and some owners are not spending money on their homes because they have no intention to put them on the market and try to upgrade to better ones.