Residential home remodeling showed modest gains during the second quarter of 2009 with increases in all indicators, according to the latest National Association of Home Builders (NAHB) Remodeling Market Index (RMI). The current market conditions measure grew to 38.1 from 34.5 in the first quarter. Future expectations rose to 34.2 from 30 in 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 as improving. The RMI has been running below 50 since the final quarter of 2005, following decreasing remodeling expenditures since that time.
“With more calls from home owners and more projects under way, remodelers are seeing better activity in their businesses,” said NAHB Remodelers Chairman Greg Miedema, CGR, CGB, CAPS, CGP, a remodeler from Tucson, Ariz. “Although remodeling jobs are still harder to find, home owners are showing more interest in remodeling spending.”
Indicators for current remodeling market conditions improved across all regions: 36.9 in the Northeast (from 35.7 in the first quarter), 38.3 in the Midwest (from 36.1), 39.7 in the South (from 34.3), and 40.5 in the West (from 32.8). A significant portion of the market improvement came from the measure for major additions and alterations (jobs worth $25,000 or more) with a leap to 38.2 (from 32.7). Smaller growth was observed in the indicators for minor additions and alternations (less than $25,000) at 41.5 (up from 39.1), and maintenance and repair at 33.6 (grew from 30.4). All measures for future expectations in the remodeling market increased significantly. Remodelers reported growth in calls for bids at 38.8 (from 34.2 in the first quarter). The backlog of remodeling jobs jumped to 34.4 (from 28.5). And appointments for proposals climbed to 40.3 (from 35.3).
“While remodelers remain cautious, they report business is looking a little better after several challenging quarters,” said NAHB Chief Economist David Crowe. “Conditions for this quarter have returned to nearly the levels of this time last year. The uptick in the expectations component suggests this trend will continue as the entire housing market begins its recovery.”
For more information, visit www.nahb.org/remodel.