The remodeling market started 2006 strongly, according to the latest release of the Remodeling Market Index (RMI). The current market conditions portion of the index — released by the National Association of Home Builders (NAHB) — rose from 46.6 in the final quarter of 2005 to 48.1 in the first quarter of 2006. The Northeast exhibited the largest surge (from 41.6 to 51.5) while the West was the only region that saw a decrease during the period, although the RMI in that region remains the highest of the four.

Source: National Association of Home Builders
Source: National Association of Home Builders

The future expectations portion of the index — which takes into account calls for bids, work committed for the next three months, backlog, and appointments for proposals — indicated continued prosperity in the coming months. It tallied a 48.9, which, if it holds true, would be a modest improvement from the current conditions in quarter one.

“Remodeling spending associated with purchasing a home usually lags behind [the purchase of the home],” NAHB chief economist David Seiders said in a press release. “The run-up in home sales during the past five years will fuel remodeling growth for the next several years.”

Vince Butler, chairman of the NAHB Remodelors Council, echoed Seiders' positive outlook. “The $11 trillion in homeowner equity continues [to fuel] the remodeling market,” he said in the release. “With remodeling spending surpassing $200 billion for the first time, we [foresee] continued long-term growth in the industry.”