The residential remodeling market continued to decline during the third quarter, according to the National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI). The market conditions indicator stands at 33.5, down from 41.8 in the last quarter. Future expectations of remodeling work also declined to 27.7, from 38.0 in the second quarter. Both are at historic lows since the start of the RMI in 2001.
The RMI measures remodeler perceptions of market demand for current and future residential remodeling projects. A number over 50 indicates that the majority of remodelers view market conditions as improving. The RMI has been below 50 since the last quarter of 2005.
The remodeling market is tightening because more home builders are taking on remodeling work, which creates a more competitive marketplace.
“Remodelers reported another drop in major home improvements, and expectations for future work have also declined,” said NAHB Remodelers chairman Lonny Rutherford, a remodeler from Farmington, N.M. “A slight increase in minor remodeling projects for owner-occupied homes suggests customers are cutting back on home improvement spending.”
“The remodeling market declines follow the pattern of the home building slow down to a lesser degree,” added NAHB chief economist David Seiders.
In the South, the RMI dropped to 31.5, from 40.1 in the second quarter; the Midwest to 36.2, from 52.9; and the West to 36.1, from 42.4. The Northeast increased slightly to 32.9, from 32.8; and the Midwest increased to 52.9, from 44.1.
The special questions section asked remodelers about energy-efficient products, which found more customer calls to improve home energy efficiency since the question was asked in the third quarter of 2006 (up to 26 percent from 24 percent). Low-energy windows are the top customer request, 50 percent of remodelers installed water-saving faucets and fixtures (up from 36 percent), and 38 percent installed on-demand water heaters (up from 29 percent).