Remodeling activity remained steady during the first quarter of 2008, according to the National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI). The current market conditions indicator increased to 41.8 from 40.9 in the fourth quarter, while the future expectations measure showed no change from the previous quarter at 37.9.
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 below 50 since the final quarter of 2005.
“The remodeling market continues to show weakness, following the downturn in the overall housing market,” said NAHB chief economist David Seiders. “We expect there to be some further erosion in 2008, with a gradual recovery in 2009.”
Nationally, the RMI components for major additions and alterations during the first quarter increased to 44.15 (from 42.28). Minor additions and alterations decreased to 41.57 (from 41.76). Maintenance and repair work increased to 39.68 (from 38.11). The amount of work committed for the next three months decreased to 29.63 (from 33.15 in the fourth quarter) demonstrating a decline in the backlog of remodeling jobs.
Consumer SpendingRebates May Pay for Upgrades
Twenty-four percent of U.S. homeowners are “considering using” the money they will receive as part of the federal economic stimulus package to upgrade or improve their homes, according to a national consumer opinion survey.
The survey found that the most popular projects for respondents considering using their rebate checks for a home improvement project included: household upgrades, including landscaping (23 percent) or an upgrade of the bathroom (13 percent) or kitchen (12 percent); improving their homes’ energy efficiency, including adding attic insulation (9 percent), caulking or sealing (4 percent), or installing energy-efficient light bulbs (4 percent); or painting a room (10 percent).
The survey was conducted by Johns Manville, a building and specialty products manufacturer, and Opinion Research Corp., a market research firm.
Existing Home SalesImprovement Expected
A flat pattern in home sales activity should continue for the next couple months before improving over the summer, according to the National Association of Realtors.
Lawrence Yun, NAR chief economist, said the extent of an expected recovery hinges on better access to affordable loans.
“Things are beginning to improve, but the availability of affordable mortgages is uneven around the country and sometimes within metropolitan areas,” he said. “As anticipated, we continue to look for a soft first half of the year, for both housing and the economy, before notable improvements in the second half. Some time is needed for FHA and new conforming jumbo loans to become widely available.”
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in March, edged down 1.0 percent to 83.0 from a downwardly revised level of 83.8 in February, and was 20.1 percent lower than the March 2007 index of 103.9.
Existing-home sales are projected to rise from an annual pace of 4.95 million in the first quarter to 5.82 million in the fourth quarter.