October 31, 2011
Nation's Building News

The Official Online Newspaper of NAHB

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Small Builders and Remodelers
Remodelers See Market Soften a Bit in Third Quarter as U.S. Economy Wobbles

Reflecting the impact of the nation’s weak economy on the remodeling industry, NAHB’s Remodeling Market Index (RMI) dropped to 41.7 in the third quarter from 43.9 in the second quarter, after reaching a four-year high of 46.5 in the first quarter.

"Remodelers report that while many consumers show interest in having remodeling work done, they are slow to commit to projects,” said NAHB Remodelers Chairman Bob Peterson, CGR, CAPS, CGP, a remodeler from Ft. Collins, Colo.

“Consumers are in a wait-and-see mode with regard to current economic conditions,” he said

On a scale of 1 to 100, the overall RMI combines remodelers’ ratings of current remodeling activity with indicators of future activity, like calls for bids.

Current market conditions for the third quarter of 2011 fell to 43.0 from 44.8 in the second quarter and future market indicators dropped to 40.4 from 43.0 in the previous quarter.

An RMI below 50 indicates more remodelers reporting a decline in activity compared to the previous quarter than reporting an increase.

Regionally, current remodeling market conditions declined from 48.1 to 43.9 in the Northeast and from 48.2 to 40.9 in the West.

The index rose from 44.4 to 46.8 in the Midwest and from 42.9 to 47.1 in the South. 

The components measuring current market conditions all decreased in the third quarter: major additions from 46.2 to 45.2, minor additions from 48.5 to 45.7 and maintenance and repair from 38.4 to 37.1.

All four future market indicators decreased as well: calls for bids from 49.8 to 45.4, amount of work committed for the next three months from 32.3 to 29.9, backlog of remodeling jobs from 45.7 to 43.0 and appointments for appraisals from 44.2 to 43.3.

“The current economic instability continues to affect consumer confidence, therefore we have seen a drop-off in remodeling activity for the last two quarters,” said NAHB Chief Economist David Crowe.

“In order for the remodeling market to pick up, home owners need to have access to less restrictive lending requirements and see their economic future stabilizing,” he added.

For information on remodeling resources at NAHB, go to www.nahb.org/remodel; or email Therese Crahan, or call her at 800-368-5242 x8211.



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

 

 

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