Remodeling Slump Continues: NAHB

Negative effects of the economic slowdown seem to have percolated nearly every market, and the residential remodeling market is no exception, as third-quarter reports showed a continued slump in remodeling activity across the nation, according the the National Association of Home Builders’ Remodeling Market Index. The current market conditions indicator fell to 33.5 during the third quarter from Q2’s 41.8, as future expectations of the demand for remodeling work fell about 10 points to 27.7. (No surprise, following recent reports of plunging consumer confidence.) 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 index has reported numbers below 50 since the final quarter of 2005. And third quarter numbers in 2008 rest at historic lows since the start of the RMI in 2001. Nationally, current activity for major additions and alterations shrank to 29.38 from a significantly higher 43.18 last quarter. Minor additions and alterations slowed 4 points to 38.51. As for maintenance and repair, Americans might be maintaining and repairing only the necessities — the index dropped to 30.92 in the third quarter. Those homeowners who are remodeling have increasingly requested energy efficient products, according to NAHB, which save money in the long-run. “The remodeling market declines follow the pattern of the home building slow down to a lesser degree,” said NAHB Chief Economist David Seiders. And we all know the market for building isn’t exactly booming these days. A closer look at current remodeling expectations regionally, revealed a drop in the South, Midwest and West, while the Northeast reported a slight increase and the Midwest posted over an 8 point increase to 52.9 — toppling the 50 point benchmark. All measures for future expectations, however, declined. “The remodeling market has taken an additional hit as more home builders have taken on remodeling work in effort to bring in missing revenue, creating a more competitive marketplace,” said NAHB. Write to Kelly Curran at kelly.curran@housingwire.com