Remodeling activity may be following the pattern set by slowed housing starts, according to the National Association of Home Builders (NAHB). The Washington, D.C., trade group just released its Remodeling Market Index (RMI), a national survey that measures remodelers’ perceptions of market demand for current and future remodeling projects.
Any number over 50 indicates that the majority of remodelers view market conditions as improving. According to the index, only the Northeast has shown some improvement, with RMI readings moving from 43.4 in the first quarter to 49.5 in the second quarter.
Other regions of the country reported declines in their readings, with the Midwest falling from 47.5 to 44.5, the South declining from 45.9 to 42.3 and the West slowing from 48.2 to 46.8.
“Not surprisingly, the remodeling market is following the downswing we are seeing in the overall housing market," said NAHB chief economist David Seiders. “We expect some further erosion in the second half of this year and in 2008, followed by a gradual recovery in 2009 and beyond."
On the question of future market conditions, remodelers differed on their expectations. In the Midwest the RMI declined from 44.7 to 43.7, in the South it fell from 50.7 to 45.0, and the West showed a rise from 45.0 to 46.0. Expectations in the Midwest remained flat at 44.1 compared with 44.3.
“While we have experienced some weakening in the remodeling market, activity has remained relatively steady," said NAHB Remodelers chairman Mike Nagel, a remodeler from Chicago. “We may have seen a decline in the number of major remodeling projects; however the market has been buoyed by an increase in the number of homeowners requesting smaller scale projects and home alterations."