"This has been an amazing year for remodeling," said NAHB Remodelors Council Chairman Douglas Sutton Sr., CGR, CAPS, a remodeler in Springfield, Ill. "With home sales remaining record-breaking, the major additions and alterations sector has kept many remodelers busy with continually growing backlogs."
The RMI is derived from a quarterly national survey of 500 remodelers. The current market conditions index moved one point, from 50.6 last quarter to 51.8. The future expectations index remained unchanged from last quarter at 52.4. Regionally, the Southern part of the country remained virtually the same in current activity, at 54.7, but gained nearly 4 points in future expectations, moving from 53.3 to 57.0. The Western region posted the highest growth in both current and future expectations rising from 54.0 to 56.9 and 58.5 to 62.3, respectively. The Midwest posted a mixed bag as it showed a minor slowdown in current activity, dropping from 47.5 to 46.6 and a minor rebound in future expectations, moving from 43.3 to 44.4. The Northeast saw the biggest fall, dropping from 57.1 to 52.8 in current activity and 57.7 to 56.2 in future expectations. This is the first time the RMI is seasonally adjusted.
"With the ongoing favorable interest rates, rising employment and household incomes, and high home price appreciation rates, we expect the remodeling market to remain on a strong growth path," said David Seiders, NAHB's chief economist. "The RMI is still above 50 which signals that the market remains healthy. All indicators point to another booming year for remodeling in 2004 and the outlook for 2005 is quite good as well."
The market saw a jump in terms of major additions and alterations, moving from 47.4 in the second quarter of 2004 to 49.2 in the third quarter, but declined somewhat for minor additions and alterations during the same period. Following a drop in the second quarter, the RMI's maintenance and repairs component saw a rebound in the third quarter, moving from 51.8 to 54.6. As in other recent quarters, the strength of remodeling activity was heavily concentrated in the owner-occupied component of the market.
Publication date: 12/20/2004