The residential remodeling market continued to slow during the third quarter of 2008, according to the National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI). The current market conditions indicator declined to 33.5, from 41.8 in the last quarter. Future expectations of remodeling work also slid to 27.7 (from 38.0 in the second quarter). Both these indices rest 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. Any number over 50 indicates that the majority of remodelers view market conditions as improving.
“Remodelers reported another drop in major home improvements, and expectations for future work have also declined,” said NAHB Remodelers Chairman Lonny Rutherford, CGR, CAPS, CGP, a remodeler from Farmington, N.M. “A slight increase in minor remodeling projects for owner-occupied home suggests customers are cutting back on home improvement spending.”
Nationally, current activity for major additions and alterations shrank to 29.38 (from 43.18 in the second quarter) during the third quarter, while minor additions and alterations slowed to 38.51 (from 42.89). Maintenance and repair dropped to 30.92 (from 39.06).
The special questions section of the survey asked remodelers about energy efficiency products, finding increased customer calls for work to improve home energy efficiency since the question was asked in the third quarter of 2006 (up to 26 percent increase in calls from 24 percent). While low-energy windows remain the top customer request, 50 percent of remodelers report installing water-saving faucets and fixtures (up from 36 percent), and 38 percent installed on-demand water heaters (up from 29 percent).
Highest Level in Four Years
With home prices decreasing and interest rates holding at historically low levels, the number of potential home buyers nationwide who can afford to buy new and existing homes has reached the highest level in more than four years, according to the National Association of Home Builders/Wells Fargo Housing Opportunity Index (HOI) released today.
According to the third-quarter HOI readings, 56.1 percent of all new and existing homes that were sold were affordable to families earning the national median income of $61,500, far more than the 40.4 percent of families who could afford homes at the peak of the housing boom.
The two most affordable major housing markets in the country during the third quarter of the year were Indianapolis, Ind., and Youngstown, Ohio, according to the HOI. In both Indianapolis and Youngstown, 91.0 percent of homes sold in the third quarter were affordable to families earning the areas’ median household incomes of $65,100 and $52,000, respectively.
Jeld-Wen Focuses on Replacements
With remodeling activity expected to far outpace new construction in 2009, Jeld-Wen has unveiled three new vinyl replacement window and patio door lines to meet the anticipated demand for remodeling-specific products.
“Vinyl replacement windows account for more than 50 percent of all windows sold in the U.S., so these new lines are a great opportunity for growth,” said Les Stephens, window marketing manager for Jeld-Wen.
The Jeld-Wen replacement windows and doors program is currently available to dealers in the West and Great Lakes regions. Stephens said the program is expected to expand to additional regions later in 2009.