Remodeling market index
The first quarter of 2002 showed gains in all categories that contribute to the NAHB's quarterly Remodeling Market Index (RMI). The reading for current market conditions went up 7 points, and the reading for future expectations jumped 11.8 points over fourth quarter 2001 numbers.
"This is welcome news that means remodeling activity has come back close to the levels of the first half of last year," says NAHB Remodelors Council chair Bill Owens.
Preliminary figures from the U.S. Census Bureau indicate residential remodeling expenditures grew by 5% overall in 2001, thanks to a strong first six months, making home remodeling a $160 billion industry last year. The RMI dropped by 10 points in the second half of 2001, a period during which the Census Bureau now estimates remodeling expenditures dropped by 9%.
Home sales down, not out
Existing home sales in March retreated further from the record level attained in the winter from mild weather and low mortgage rates. Still, the 5.4 million annualized rate is above the 5.3 million level attained last year. Increases in home values in March continued to support demand for remodeling.
Industry unemployment up
Unemployment in the construction industry rose to a seasonally adjusted 8.8% in March after falling in February as nonresidential construction continues to ease. Loosening in the labor market reduced pressure for compensation costs, which declined to 4.0% at annual rates in the first quarter from 4.3% in the fourth quarter.
Disposable income growing
Growth in per capita personal income is positive for the economy, even though it slowed a little in March. The 2% inflation-adjusted growth rate, reported by the U.S. Department of Labor in March, supports healthy consumer spending increases without pressuring inflation.