Homeowners Adopt "Wait and See" View of Remodeling

According to the National Association ofrnHome Builders (NAHB) the remodeling industry has been increasingly impacted byrnthe state of the national economy.  Afterrnhitting a four-year high of 46.5 in the first quarter of this year, NAHB’srnRemodeling Market Index (RMI)  dropped torn43.9 in the second quarter and, in third quarter data released on Thursday, isrnnow at 41.7.  An RMI below 50 indicatesrnthat more remodelers report that market activity is declining than report thatrnit is increasing.</p<p"Remodelers report that while many consumers show interest in havingrnremodeling work done, they are slow to commit to projects," said NAHB RemodelersrnChairman Bob Peterson. "Consumers are in a 'wait and see' mode with regardrnto current economic conditions."</p

The overall RMI combines ratings ofrncurrent remodeling activity with indicators of future activity.  In the third quarter, the RMI componentrnmeasuring current market conditions fell to 43.0 from 44.8 in Quarter Two.  All three factors within that component alsorndropped; work on major additions decreased from 46.2 to 45.2; minor additions torn45.7 from 48.5, and maintenance and repair to 37.1 from 38.4. </p

The component measuring futurernindicators of remodeling business and its underlying factors declined as well.  The future indicator was down from 43.0 inrnthe last quarter to 40.4 and calls for bids decreased from 49.8 to 45.4; thernamount of work committed for the upcoming three months declined from 32.3 torn29.9; job backlog from 45.7 to 43.0, and appointments for appraisals to 43.3rnfrom 44.2. </p

Regionally, current remodeling marketrnconditions shrank in the Northeast to 43.9 (from 48.1 in the second quarter) andrnthe West to 40.9 (from 48.2) while increasing in the Midwest at 46.8 (from 44.4) and the South atrn47.1 (from 42.9). Future market indicators fell in all regions, except for thernSouth, where it edged up to 42.2 from 41.6 in the second quarter.<br /<br /"The current economic instability continues to affect consumer confidence,rntherefore we have seen a drop off in remodeling activity for the last twornquarters,” said NAHB Chief Economist David Crowe. “In order for thernremodeling market to pick up, home owners need to have access to lessrnrestrictive lending requirements and see their economic futurernstabilizing.”

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