Remodeling Activity Declines in Third Quarter

Washington, DC, Nov. 2, 2011 -- Remodeling and replacement activity nationally declined in the third quarter, according to the Residential Remodeling Index by Hanley Wood.

The seasonally adjusted third quarter national composite of the RRI registered a score of 80.17, which was a decline of 0.8 percent over the revised second quarter result of 80.84.

The RRI is showing that remodeling activity has declined nationally in 2011 as the economy in general and the housing market see a tepid recovery.

Hanley Wood's October forecast is calling for a minor decline in the fourth quarter followed by minor improvements in the first two quarters of 2012 and then slightly better improvements in the third and fourth quarters of 2012.

"Remodeling and replacement projects are correlated to economic conditions and housing activity, both of which have been disappointing in 2011," said Jonathan Smoke, Hanley Wood's executive director of research.

"Couple that with some energy related replacement projects moving demand forward into the end of 2010 and you can understand why 2011 has not materialized as the beginning of a long hoped for recovery for the industry."

"Remodeling seems poised and overdue for increases in activity because of Boomers moving closer to retirement, necessary and overdue home improvement projects on aging housing stock, and even greater activity caused by purchases of previously foreclosed homes. But those positive forces for movement are running smack into negative consumer psyche that makes them hesitant to pull the trigger on major improvements."