By Robert J. Sheehan II. Remodeling market index
Remodelers' evaluation of current market conditions and expectations for the future were worse than for last quarter, but they were more positive than a year ago. At 49.3 in the third quarter, the RMI for current conditions is down from 52.7 in the second quarter; the Future Expectations Index dropped to 48.0 from 52.2 a quarter earlier. All regions experienced improvements over the same period a year ago except the Midwest, where remodelers were slightly less positive about current conditions than during the third quarter last year.
Leading economic indicators
The threat of a double-dip recession continues to grow but remains unlikely. While the Conference Board's Index of Economic Indicators fell for the fourth straight month in September, the 3.5% total decline over the four-month period is well below the drops experienced in previous recessions.
Consumer confidence fell for the fifth straight month in October. The October level is the lowest since November 1993. While both components of the index fell, the most marked decline was in consumers' negative expectations about employment, income, and business conditions. Waning consumer confidence is aggravated by the absence of pent up demand.
Second mortgage interest rates
Interest rates for remodeling projects were essentially unchanged in October and remain attractive to homeowners. Second mortgage interest rates were about 5.13% in October vs. the record low of 5.11% in September.