Remodeling activity decreased in the fourth quarter to a Remodeling Market Index (RMI) score of 40.9 from 46.2 in the previous quarter, according to the National Association of Home Builders (NAHB). The future expectations measure also fell -- to 37.9 from 43.3 in the previous quarter.
The NAHB attributed the declines “to pressure from the housing downturn.” However, the group noted, “While housing starts have fallen sharply from the peak in early 2006, the remodeling market has shown a much smaller decline.”
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 the market conditions as improving. The RMI has been running slightly below 50 since the final quarter of 2005.
“While the housing downturn has impacted the remodeling market to some degree, it is on a much smaller scale than the rest of the market,” said NAHB Remodelers chairman Mike Nagel. “Homeowners realize the importance of maintaining their property and making necessary repairs to support the value of their homes, so we expect this type of work to start to pick up again.”
Nationally, the RMI components for major additions and alterations during the fourth quarter declined to 42.28 (from 46.89). Minor additions and alterations also decreased to 41.76 (from 47.07), except for an increase in the South to 49.81 (from 43.68). Maintenance and repair remodeling work declined to 38.11 in the fourth quarter (from 44.31).