Remodelers Report Slower Market in Fourth Quarter
Remodelers have begun to feel some of the adverse effects of the housing downturn, according to results of NAHB’s Remodeling Market Index (RMI), which were released earlier this month.
Current market conditions dropped to 40.9 on the index for the final three months of last year, down from 46.2 in the third quarter, and future expectations fell from 43.3 to 37.9.
The RMI measures remodeler perceptions of market demand for current and future residential remodeling projects. Any number over 50 indicates that the majority of remodelers view market conditions favorably. The RMI has been running slightly below 50 since the final quarter of 2005.
"While the housing downturn has impacted the remodeling market to some degree, it is on a much smaller scale than the rest of the market" said NAHB Remodelers Chairman Mike Nagel, CGR, CAPS, a remodeler from Chicago. "Home owners realize the importance of maintaining their property and making necessary repairs to support the value of their homes, so we expect this type of work to start to pick up again."
Nationally, the RMI components for major additions and alterations during the fourth quarter declined to 42.28, down from 46.89. Minor additions and alterations decreased from 47.07 to 41.76, with the exception of the South, where they increased from 43.68 to 49.81. Maintenance and repair remodeling registered 38.11 on the index, down from 44.31.
"The decline in the remodeling market is far less than in the new home market and generally consistent with our remodeling forecast," said NAHB Chief Economist David Seiders.
In the "special questions" section of the RMI survey, remodelers were asked about business conditions during 2007 and their expectations for 2008.
Forty-three percent of respondents reported an increase in billing in 2007 and 25% reported billing at the same level as in 2006. For the year ahead, 51% predicted they would see an increase in dollar volume and 27% expected to maintain the same volume as last year.
For more information about NAHB’s remodeling resources, click here; or e-mail Kelly Mack, or call her at 800-368-5242 x8451.
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