Remodeling Activity Falls in Third Quarter

Washington, DC, Oct. 28, 2011 -- Remodeling activity continues to be hurt by the economic downturn, according to the latest National Association of Home Builders' Remodeling Market Index (RMI).

The index dropped to 41.7 in the third quarter from 43.9 in the second quarter, after having reached a four-year high of 46.5 in the first quarter.

An RMI below 50 indicates that more remodelers report that market activity is declining than report that it is increasing.

In the third quarter, the RMI component measuring current market conditions fell to 43.0 from 44.8 in the previous quarter. The RMI component measuring future indicators of remodeling business declined as well, to 40.4 from 43.0 in the last quarter.

"Remodelers report that while many consumers show interest in having remodeling work done, they are slow to commit to projects," said Bob Peterson, NAHB Remodelers chairman, a remodeler from Ft. Collins, Colo. "Consumers are in a 'wait and see' mode with regard to current economic conditions."

Consumer confidence is down, which has led to a dropoff in activity the last two quarters, according to David Crowe, chief economist, NAHB.

"In order for the remodeling market to pick up, home owners need to have access to less restrictive lending requirements and see their economic future stabilizing."