Remodeling performed relatively well in the fourth quarter despite a slower overall housing market, according to the latest release of the Remodeling Market Index (RMI). The “current conditions” portion of the index increased modestly to 48.2 from 47.8 points. That's the highest it's reached since the third quarter of 2005, when the RMI was last above 50 — the watermark for a “positive” market.
Dave Seiders, chief economist for the National Association of Home Builders (NAHB), which publishes the RMI, was optimistic that remodeling would stay steady during these uncertain times for housing. “Though the substantial reductions in home sales and new-housing production have had an impact on the remodeling market to some degree, we feel that remodeling of both owner-occupied and rental housing will remain strong compared to other areas of the industry,” he said in a press release. “With record levels of homeowner equity and the constant need to upgrade the older housing stock, the remodeling outlook appears quite good for years to come.”
The remodelers surveyed didn't necessarily share Seiders' optimism. The “future expectations” portion of the RMI was a modest 46, more than two points below the current conditions. For what it's worth, however, the future expectations index has underestimated the market by a couple of ticks of late.