According to an association indicator, the second quarter of 2010 shows a decline in the remodeling market. The National Association of Home Builder’s (NAHB) Remodeling Market Index (RMI), measures market demand for current and future residential remodeling projects based on remodelers' perceptions and indicators of future activity, such as calls for bids. Current market conditions dropped from 44.5 in the first quarter to 42.6 in the second quarter. The overall index, which includes both current and future market indicators, dropped from 43.8 in the first quarter to 40.7 in the second quarter. Future indicators of remodeling business declined to 38.9 from 43.1 in the last quarter.
According to NAHB chief economist David Crowe, this drop is part of the overall chill that has taken place in the housing market and U.S. economy, including soft unemployment reports. “It’s a recurrence of the reluctance that has been the cause of a slow recovery. This is a second jolt of that reluctance,” he says. There are signs, he says, that the drop is just a pause and not an actual downturn in the overall market or the remodeling market.
The current conditions indices for the remodeling marketed worsened in the Northeast and in the South. However, the indices improved in the Midwest and West. Crowe says he does not have an explanation for the pockets of strong activity in the regional categories. There is no indication that home equity lending is loosening, Crowe says, and notes that NAHB members say much of their work is funded directly by homeowners and more modest in scope. Nina Patel, Senior Editor, Remodeling