Remodeling Market Strengthens in Third Quarter
Remodeling activity picked up in this year’s third quarter, according to the NAHB Remodeling Market Index (RMI). Seasonally adjusted, remodelers’ assessments of current market conditions increased from 45.6 to 47.8 on the index and their future expectations rose by nearly two points to 45.4.
“Though market strength varies across the country, we are pleased to see a rebound in remodeling activity,” said Remodelors™ Council Chairman Vince Butler, CGR, CAPS, GMB, a remodeler from Clifton, Va. “The trillions of dollars in home owner equity, combined with the growing age of the housing stock, means that the remodeling market will remain relatively strong in the face of a slower housing market.”
Regionally, current market conditions moved back into positive territory on the index in the South and West, which registered 51.1 and 51.4, respectively. Future market conditions rose by more than six points to 50.4 in the South and 56.8 in the West. Current market conditions remained unchanged n the Northeast, at 46.6, while future conditions increased to 47.7. Current conditions in the Midwest rose from 41.3 to 45.4, but future conditions declined from 40.6 to 38.3.
A reading of higher than 50 on the index indicates that more remodelers are positive than negative in their view of the market.
The RMI component for owner-occupied units increased from 49.0 to 51.4 in the third quarter, while the component for renter-occupied units decreased slightly from 39.0 to 38.8. On the future expectations index, owner-occupied units declined from 47.2 to 45.0, but rental units jumped dramatically from 28.8 to 37.1. Rental-property remodeling accounts for a third of all remodeling expenditures.
“While growth of remodeling activity has slowed as new home construction has declined, we still anticipate a strong year in the remodeling market,” said NAHB Chief Economist Dave Seiders. “We currently forecast $233 billion in home remodeling spending for 2006, up from $215 in 2005.”
Those participating in the survey were asked special questions about energy efficiency and “green” remodeling trends.
Twenty-five percent reported that they had seen an increase in demand for energy features within the last three months; 69% saw no change. Of common energy-saving materials installed within the last three months, the most popular were low-energy windows (86%), insulated exterior doors (69%), upgraded insulation (65%) and ceiling fans (59%). Overall, 62% said that they were using recycled or recyclable products.
For more information, e-mail Jim Lapides at NAHB, or call him at 800-368-5242 x8451.