Residential remodeling expectations slip, builders say
SBJ Staff
Posted online
The residential remodeling market continued its slump during the third quarter, according to the latest Remodeling Market Index from the National Association of Home Builders. The current market conditions indicator, released Nov. 11, dropped to 33.5, from 41.8 in the last quarter. Future expectations of remodeling work also slid to 27.7 from 38 in the second quarter.
Both these indices rest at historic lows since the start of the RMI in 2001.
The RMI measures remodelers' 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, implying decreasing remodeling expenditures since that time.
"Remodelers reported another drop in major home improvements, and expectations for future work have also declined," said NAHB Remodelers Chairman Lonny Rutherford, in a news release. "A slight increase in minor remodeling projects for owner-occupied homes suggests customers are cutting back on home improvement spending."
Nationally, current activity for major additions and alterations declined to 29.38 in the third quarter, down from 43.18 in the second quarter.
Minor additions and alterations slowed to 38.51 from 42.89, and maintenance and repair dropped to 30.92 from 39.06.
"The remodeling market declines follow the pattern of the home building slowdown to a lesser degree," said NAHB Chief Economist David Seiders in the release.
The remodeling market is tightening due to more home builders taking on remodeling work, creating a more competitive marketplace and flattening out calls for bids and appointments for proposals, NAHB leaders said.
Regionally, current market expectations fell in the third quarter, with the Midwest dropping to 36.2 from 52.9 in the second quarter, the South dropping to 31.5 from 40.1 and the West falling to 36.1 from 42.4. Expectations in the Northeast increased slightly to 32.9 from 32.8.
All measures for future expectation - calls for bids, amount of work committed for next three months, backlog of remodeling jobs, and appointments for proposals - declined.
According to the index, remodelers report increased customer calls regarding work to improve energy efficiency of their homes.
While low-energy windows remain the top customer request, 50 percent of remodelers report installing water-saving faucets and fixtures (up from 36 percent) and 38 percent installed on-demand water heaters (up from 29 percent).
