Remodelers See Early Signs of Recovery in First Quarter
The residential remodeling market showed significant signs of improvement during the first quarter of 2009, according to the latest NAHB Remodeling Market Index (RMI), which was released on May 14.
The index showed current market conditions rising to 34.5 in the first three months of this year, up from 25.5 in the final quarter of 2008. Remodelers’ future expectations jumped to 30 on the index, up from a historic low of 18.6 for the previous quarter.
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 positively. The RMI has been running below 50 since the final quarter of 2005 as a result of declining remodeling expenditures.
"Remodelers are starting to receive more calls for bids and requests for proposals, although getting customers to sign for a job continues to remain a challenge," said NAHB Remodelers Chairman Greg Miedema, CGR, CGB, CAPS, CGP, a remodeler from Tucson, Ariz. "While the size of the jobs is smaller, remodelers are optimistic about this uptick in market activity."
The component of the RMI tracking market conditions for major additions and alterations rose to 32.7 in this year’s first quarter, up from 19.4 in the fourth quarter of 2008. Minor additions registered 39.1 on the index, up from 31.5; and maintenance and repairs climbed from 23.6 to 30.4.
Measures of future expectations showed healthy improvements during the first quarter. On the rise were calls for bids, which climbed from 20.6 to 34.2; the backlog of remodeling jobs, from 18.4 to 28.5; appointments for proposals, from 19.1 to 35.3; and the amount of work committed for the next three months, from 21.8 from 16.4.
"Remodelers say things are looking up from the doldrums of the fourth quarter," said NAHB Chief Economist David Crowe. "While conditions remain below average and are down slightly from this time last year, the gains over the last quarter, along with improvement in market expectations, suggest a spark to the start of recovery in the remodeling market."
For more information on NAHB’s remodeling resources, click here; or e-mail Kelly Mack, or call her at 800-368-5242 x8451.