Remodelers Report Moderate Growth in First Quarter
Remodelers reported moderate growth in the first quarter of 2006, according to the NAHB Remodeling Market Index (RMI), which saw market conditions move up from 46.6 for the closing quarter of 2005 to 48.1 and future expectations advance from 47.5 to 48.9
Current market conditions on the RMI for owner-occupied units rose from 48.9 to 53.8, while renter-occupied units fell from 40.4 to 36.7. Future expectations for owner-occupied units moved up from 50.4 to 53.2, while the renter-occupied component declined from 37.8 to 30.4. Any number over 50 indicates that market conditions are expanding in the view of the majority of remodelers who are surveyed for the index.
Remodeling accounts for 40% of all residential construction and improvement spending and almost 2% of the U.S. economy.
“The $11 trillion in home owner equity continues feeding the remodeling market,” said Remodelors™ Council Chairman Vince Butler, CGR, CAPS, GMB. “With remodeling spending surpassing $200 billion for the first time, we see continued long-term growth in the industry.”
“Though the frenzy in home buying is slowing down, the remodeling spending associated with purchasing a home usually lags behind,” said NAHB Chief Economist Dave Seiders. “The run-up in home sales during the past five years will fuel remodeling growth for the next several years, and the long-term growth looks to be solid as well.”
Regionally, the index found strong growth across the country, with the exception of the West, which nevertheless remained within the positive range. Current conditions in the Northeast climbed nearly 10 points from 41.6 to 51.1, and the region’s future conditions rose from 41.0 to 47.3. Current conditions increased from 41.1 to 44.3 in the Midwest, where future expectations were up a scant 0.4 point, to 46.6.
A special question included in the first-quarter survey asked participants about the age of their customers. Of the remodelers who were surveyed, 91% said that they had done work for baby boomer home owners aged 46-64; 26% had lined up jobs with 36-45-year-old GenXers; 13% had senior clients 65 and older; and 2% had worked with Gen Y households who are 35 and under.
For more information, e-mail Jim Lapides at NAHB, or call him at 800-368-5242 x8451.
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