The latest National Association of Home Builders' (NAHB) Remodeling Market Index (RMI) edged up to 41.5 in the fourth quarter of 2010, compared to 40.8 in the third quarter. An RMI below 50 indicates that more remodelers say market activity is lower compared to the prior quarter than report it is higher. The RMI has been running below 50 since the final quarter of 2005.
The overall RMI combines ratings of
current remodeling activity with indicators of future activity like calls for
bids. 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.
"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."
All but one index for future market
conditions improved during the fourth quarter. Calls for bids jumped to 47.2
(from 42.9), along with 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 shrank to 25.9 (from 30.3).
"Remodeling activity has been
rising slowly since the first quarter of 2010. Expected improvements in the job
market and the overall economy are beginning to increase homeowners' confidence
and remodelers are seeing indications that business will pick up," said
NAHB Chief Economist David Crowe. "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."
Current conditions indices for remodeling
improved in two regions: Midwest 54.3 (from 44.9 in the third quarter) and
South 45.8 (from 42.3). However, the current indices declined in the Northeast
38.8 (from 41.6) and West 39.7 (from 49.3). Future market indicators grew
significantly in nearly all regions: Northeast 49.5 (from 34.0); Midwest 56.1
(from 39.4); and South 47.0 (from 37.9). Only the West region reported some
decline at 39.7 (from 41.0). Major additions also expanded to 48.6 (from 45.8),
but minor additions dipped slightly to 43.9 (from 46.4), while maintenance and
repair stayed flat at 37.0 (from 37.1).
information about remodeling, visitwww.nahb.org/remodel.
NAHB: Remodelers expect market gains during 2011
January 28, 2011