The decline in remodeling may be nearing an end, according to the NAHB Remodeling Market Index (RMI) for this year’s first quarter, which rose to 47.9, up from 33.9 in the previous quarter. This was the RMI’s highest level since the first quarter of 2006.

Component indexes of the RMI showed current market conditions climbing to 47.0, up sharply from 36.4 in the fourth quarter of 2009. Over the same period, future indicators of remodeling business rose to 48.9, up from 31.4.

“Remodelers are receiving more calls for work, but getting to signed contracts is still challenging,” said NAHB Remodelers Chairman Donna Shirey, CGR, CAPS, CGP, a remodeler from Issaquah, Wash. “We’re working a little more but not making more due to tighter margins, onerous federal regulations and consumer anxiety about making large purchases.”

The RMI measures remodeler perceptions of market demand for current and future residential remodeling projects. Any number below 50 indicates that more remodelers view market conditions as poor than good. The RMI has been running below 50 since the final quarter of 2005.

“Although the overall RMI and most of its components are still slightly below the break-even point of 50, the recent improvements suggest that the remodeling market may soon reach its bottom and begin to grow in the coming months,” said NAHB Chief Economist David Crowe. “However, professional remodelers are still operating in a highly competitive marketplace and dealing with consumers who are uncertain about the future.”

Regionally, current conditions for the remodeling market rose from 27.7 in fourth quarter 2009 to 45.8 in the first quarter of this year in the Northeast, from 37.5 to 47.0 in the Midwest and from 40.0 to 49.0 in the South. Conditions declined in the West from 41.7 to 36.6.

From the last quarter of 2009 to the first quarter of this year, major additions climbed from 40.0 to 53.8, minor additions rose from 40.7 to 49.6 and maintenance and repair grew from 27.1 to 36.6.

Among future indicators of market activity, increases were seen in calls for bids, which rose from 37.5 to 56.3; appointments for proposals, rising from 34.4 to 59.2; the amount of work committed for the next three months, moving from 21.9 to 33.0; and the backlog of remodeling jobs at 47.2, up from 31.9.

“Although the overall RMI and most of its components are still slightly below the break-even point of 50, the recent improvements suggest that the remodeling market may soon reach its bottom and begin to grow in the coming months,” said NAHB Chief Economist David Crowe. “However, professional remodelers are still operating in a highly competitive marketplace and dealing with consumers who are uncertain about the future.”

For more information, e-mail Kelly Mack at NAHB, or call her at 800-368-5242 x8132.

Learn How to Run a Successful Remodeling Company

“The Paper Trail: Systems and Forms for a Well-Run Remodeling Company,” available through BuilderBooks.com, shows how to use proven management systems to run a successful remodeling company.

The publication includes a CD containing 160 essential forms and documents — culled from successful remodelers across the country — that you can customize to suit your business needs.

To view or purchase this publication online, click here, or call 800-223-2665.

'How to Find a Professional Remodeler' Brochures Available at BuilderBooks.com

"How to Find a Professional Remodeler," available at BuilderBooks.com, promotes the professionalism of your remodeling business by offering a wealth of valuable advice to customers on the process of selecting a remodeler. 

The newly updated brochure highlights the before and after photos of the most frequently remolded rooms in the house.

To view or purchase this publication online, click here, or call 800-223-2665.