(Jul. 29) The residential remodeling market slid backwards during the second quarter, according to the National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI). The market conditions indicator stands at 40.7, down from 47.9 in the first quarter. Future expectations of remodeling work also declined to 38.9, from 43.1 in the second quarter.

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.

"Remodelers are suffering from weak consumer confidence and constricted credit lines," said NAHB Remodelers chairman Donna Shirey, a remodeler from Issaquah, Wash. "Homeowners are delaying remodeling projects because of economic uncertainty."

The NAHB said that many of the larger remodeling jobs that were common in 2004, like room additions, whole house remodeling, bathroom additions and second-story additions were in decline, while remodelers have taken more small handyman type jobs.

The NAHB compared historical data showing only 29 percent of remodelers reported that room additions were a common activity in 2010, compared with 70 percent in 2004. Conversely, the NAHB reported none of the professional remodelers responding to the survey reported that it was common for their companies to perform handyman services in 2004, while 33 percent of remodelers were regularly providing handyman work in the first half of 2010.

In the Northeast, the RMI dropped to 46.2, from 49.4 in the first quarter; the South saw a drop to 42.4, from 44.1; the Midwest increased to 44.7, from 43.8; and the West increased to 42.0, from 34.8.

Responding to additional special questions in the survey, remodelers also reported on the changing composition of remodeling projects. Sixty-one percent said bathroom remodeling was one of their most common projects during the first half of 2010. Kitchen remodeling came next with 52%. In previous years, kitchen remodeling was reported as the most common activity by more than 70% of remodeler respondents.

"While remodelers are continuing to struggle, we expect the rest of 2010 to be a period of stabilization for remodeling, with the first stages of recovery emerging by the end of the year, followed by a more robust recovery beginning early next year," said NAHB chief economist David Crowe. "For now, professional remodelers are taking on smaller projects and working to find consumers willing to spend money despite the economic uncertainty."