The latest NAHB Remodeling Market Index (RMI) rose to 41.5 in the fourth quarter of 2010, edging up from 40.8 in the third quarter, indicating that remodelers may be gaining confidence as the industry gears up for improvements in 2011.

On a scale of 100, an RMI below 50 indicates that more remodelers see market conditions as poor rather than good. The overall RMI — which combines indicators on current remodeling and future activity, such as calls for bids — has been running below 50 since the final quarter of 2005.

“Remodelers are starting to see an uptick in interest from consumers who are considering future remodeling projects,” said NAHB Remodelers Chairman Bob Peterson, CGR, CAPS, CGP, a remodeler from Ft. Collins, Colo. “Home owners are also showing more willingness to undertake larger remodeling projects.”

“Remodeling activity has been rising slowly since the first quarter of 2010,” said NAHB Chief Economist David Crowe. “Expected improvements in the job market and the overall economy are beginning to increase home owners’ confidence and remodelers are seeing indications that business will pick up.”

“More remodeling jobs will unfold as consumers in more secure financial positions enter the remodeling market. A more robust recovery in residential remodeling will depend upon future improvements in labor and credit markets,” Crowe added.

In the fourth quarter, the RMI component measuring current market conditions stayed flat at 43.3 from 43.4 in the previous quarter. The RMI component measuring future indicators of remodeling business increased, to 39.7 from 38.1 in the previous quarter.

Current conditions for remodeling climbed from 44.9 to 54.3 in the Midwest and from 42.3 to 45.8 in the South, and fell from 41.6 to 38.8 in the Northeast and from 49.3 to 39.7 in the West. Future market indicators rose significantly from 34.0 to 49.5 in the Northeast, from 39.4 to 56.1 in the Midwest 56.1 and from 37.9 to 47.0 in the South, but dropped slightly from 41.0 to 39.7 in the West. Major additions in the fourth quarter advanced from 45.8 to 48.6, while minor additions dipped slightly from 46.4 to 43.9 and maintenance and repair posted a flat 37.0, down a tad from 37.1.

Among indices of future activity, on the rise were calls for bids, which jumped to 47.2 (from 42.9); backlog of remodeling jobs at 42.6 (from 37.2), and appointments for proposals at 43.1 (from 41.9). The amount of work committed for the next three months declined to 25.9 (from 30.3).

For more information, e-mail Kelly Mack at NAHB, or call her at 800-368-5242 x8451.

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