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Two different forecasts portend a recovery in the repair and remodeling market based on current jobs, calls for bids and proposals, and job commitments over the next three months.
The National Association of Home Builders' (NAHB) Remodeling Market Index (RMI) reported an increase to 46.5 in the first quarter of 2011 from 41.5 in the fourth quarter of 2010. This marks the highest level for the RMI since the fourth quarter of 2006.
The overall RMI combines ratings of current remodeling activity with indicators of future activity. In quarter-over-quarter comparisons, current market conditions for the first quarter of 2011 rose to 46.1 from 43.3 in the previous quarter.
"Remodelers report a jump in activity so far this year and have been receiving more calls for work and appointments," said NAHB Remodelers chairman Bob Peterson, a remodeler from Ft. Collins, Colo. "However, many homeowners are still slow to commit to remodeling due to feeling uncertain about the economic recovery and difficulty obtaining loans."
Regional breakdowns for current remodeling market conditions showed growth in all but one area: the Midwest, which experienced a decline to 47.1 (from 54.3). The other three regions of the country showed increases: the Northeast was 46.1 (from 38.8 in the fourth quarter), the South was 46.1 (from 45.8), and the West was 46.1 (from 39.7).
All current remodeling market indicators increased: major additions to 50.3 (from 48.6 in the fourth quarter), minor additions to 48.0 (from 43.9), and maintenance and repair to 39.5 (from 37.0). Future market indicators also improved across the board: Calls for bids rose to 53.1 (from 47.2), appointments for proposals to 52.4 (from 43.1), backlog of remodeling jobs to 49.7 (from 42.6), and amount of work committed for the next three months to 32.1 (from 25.9).
BuildFax compiles its residential BuildFax Remodeling Index (BFRI) from building and permitting information from more than 4,000 cities and counties throughout the country. Its most recent data shows that every region of the United States had more remodeling activity in February 2011 than in February 2010. The BFRI rose 20% year-over-year -- and for the sixteenth straight month -- in February to 95.1, the highest February number in the index since 2006. Residential remodels in February were down month-over-month 3.9 points (4%) from the January value of 99.0, and up year-over-year 16.0 points from the February 2010 value of 79.1.
All regions posted year-over-year gains, although the West posted the highest at 21%, reaching well past index values in February 2010, 2009, 2008 and 2007. It was down 3% between January and February of 2011, however. The Midwest showed a larger-than-expected month-over-month decline of 22% between January and February, but rose slightly (1%) in year-over-year comparisons. The Northeast’s February 2011 BFRI numbers were up 7% year-over-year and down 11% month-over-month. The South was up 11% year-over-year and down 1% month-over-month.
“The cold weather and heavy snows in February could not put a damper on the sustained gains in the remodeling industry, as the month showed increased remodeling activity compared with a year earlier,” said Joe Emison, VP research and development at BuildFax. “February 2011 was a strong month for the industry, despite the fact that remodeling activity traditionally dips during the winter months. February 2011 was better than or equal to February 2010 in every region of the country.”