Sept. 10, 2003: Residential Remodeling Picks Up In Second Quarter
"Surging home sales, steadily rising home values (against which people borrow to finance improvements), and a low-interest-rate environment all contributed to the pickup in remodeling in the second quarter," said Mike Weiss, chairman of the NAHB Remodelors™ Council. "Moreover, signs of an improving economy and rejuvenating consumer confidence mean the future is looking even brighter for professional remodelers."
The quarterly RMI is based on a survey of about 550 professional remodelers, whose answers to a series of questions are assigned numerical values in order to calculate two separate indexes. The first index gauges current market conditions and is based on remodelers' reports of major and minor additions and alterations, plus maintenance work and repairs, on both owner- and renter-occupied dwellings. The second index gauges expectations for the near future and is based on remodelers' reports of their calls for bids, amount of work committed for the next three months, job backlogs, and appointments for proposals.
Both indexes recorded significant gains in this year's second quarter. The index gauging current market conditions rose 7.2 points from the first quarter to 53.6, its highest mark since the second quarter of 2001. A year-over-year comparison shows a 3-point gain from 2002's second quarter. Likewise, the index gauging future expectations rose to its highest level in two years, at 54.8. That is 4.5 points above its standing in the first quarter and 2.6 points above its year-ago level.
David Seiders, NAHB’s chief economist, noted, "Remodelers are registering substantially more calls for bids, commitments for work over the next three months, and backlogs of jobs in the pipeline than they have since at least the beginning of last year. That's a good basis for a truly optimistic outlook."
The West was the strongest region for professional remodeling in 2003's second quarter, posting the highest RMI readings for both current market conditions and future expectations. Every region posted gains from the previous quarter with the exception of the Northeast, where current market conditions rose but future expectations slid several points.
Publication date: 09/08/2003