|
Remodeling Gains Strength in the First Quarter
Remodeling activity strengthened in this year’s first quarter, according to NAHB’s Remodeling Market Index (RMI), moving up two points from its seasonally adjusted level for the fourth quarter of 2004.
“The RMI showed a nice rebound from some worse-than-normal weather this past winter, particularly in the Northeast and Midwest,” said Remodelors Council Chairman Don Novak, CGR, CAPS, CGB, a remodeler from Cedar Rapids, Iowa.
The RMI is derived from a quarterly national survey of more than 500 remodelers.
The component of the index gauging current market conditions moved up from 50.7 during the final three months of 2004 to 52.9 in this year’s first quarter. The measure of the future expectations of remodelers dipped slightly from 54 to 53.6, but remained in the positive zone. Any number over 50 indicates that more remodelers view market conditions as positive than negative.
Remodeling market conditions grew stronger early this year in every region of the country except the West:
- Current conditions were up 7.1 points in the Northeast, climbing from 46.7 to 53.8, but future expectations in the region registered a 1.3-point decline.
- Current activity improved by 2.9 points in the Midwest, reaching 48.9 on the index, while future expectations declined from 48.8 to 47.6.
- The South saw current remodeling activity rise 5.5 points from 52.9 to 58.4 and posted a 2.2-point gain in future expectations to 60.1.
- In the West, remodelers’ assessment of current activity weakened by 5.1 points to a still-healthy reading of 53.6, and expectations were down 3.1 points to 54.2
“We saw solid growth in the first quarter of this year and continued positive momentum into the next quarter,” said NAHB Chief Economist Dave Seiders. “Calls for bids, amounts of work committed and backlogs of remodeling jobs are all up, leading us to expect continued healthy growth over the balance of 2005.”
The market saw little change in major additions and alterations costing $25,000 or more, which registered 50.19 on the index, up from 49.88. The renter-occupied share of this market, on the other hand, grew by more than five points, from 34.45 to 39.7. The reading for minor additions and alterations moved up from 50.15 to 52.78 overall, but climbed a full seven points for renter-occupied housing. Renter-occupied housing accounts for roughly one-third of all remodeling activity.
In a special question included in the RMI for the first quarter, remodelers were asked about in-house design services and their involvement with retailers and professional design dealers, such as Lowe's and Home Depot.
Of the 66% of remodeling companies that offer design services to customers, only 6% work with a retailer or professional design dealer, the survey found. Fifty-seven percent said they used a general designer, 17% an interior designer, 15% a certified kitchen designer and 15% an architect.
|
