WASHINGTON -- 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 remodeling work increased to 39.68 in the first quarter (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.
"While remodeling is down nationally, some markets continue to churn with activity," said NAHB Remodelers Chairman Lonny Rutherford, CGR, CAPS, CGP, a remodeler from Farmington, N. M. "Many remodelers are seeing smaller jobs and have a shorter backlog, but we expect activity to increase because necessary home repairs cannot be postponed for a long time."
Regionally, current market expectations dropped in the first quarter in the Northeast to 36.4 (from 38.6), and in the South to 42.2 (from 45.0). The Midwest however increased to 44.1 (from 41.1) and the West was up slightly to 42.9 (from 42.2).
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