Washington, DC, Nov. 18--Home owners took a breather in the third quarter from the flurry of remodeling activity that marked the first half of the year, according to the National Association of Home Builders' (NAHB) most recent Remodeling Market Index (RMI). Both the index for current market conditions and the future market index slipped by several points from the second quarter this year to just below the 50 point mark. However, they are still well above the RMI scores for the third quarter last year. Despite this slowing, new figures from the U.S. Bureau of Census indicate that total consumer expenditures for remodeling will exceed last year's record spending of $159 billion by roughly 6% at close to $169 billion.
"Compared to last fall, business is holding up very well," said Bill Owens,
CGR, a remodeler from Columbus, Ohio, and chairman of the NAHB
Remodelors Council. "Low interest rates and the strength in the new
housing market as well as strong sales of existing homes are positive signs that home owners will continue to view remodeling as a sound investment from both a financial and lifestyle perspective."
The RMI for current market conditions declined by three points to a 49.8
rating during the third quarter, but was still significantly higher than
last year's third quarter RMI score of 42. On the regional level, RMI
scores ranged from a high of 53.1 in the Northeast to a low of 45.6 in the
Midwest, which showed a ten point drop from the previous quarter, the largest of any region in the country. The South was the only region to register an increase in current market conditions, moving upward by a modest one point to a 50.4 rating. Any RMI score over 50 indicates that more remodelers view market conditions as favorable than unfavorable.
Of the three components that make up the RMI for current market conditions, maintenance and repairs slipped a notch to 54.3, while the scores for minor additions and alterations (less than $25,000) and for major additions and alterations (more than $25,000) declined to 48.1 and to 47.5, respectively.
The RMI for future market conditions for the nation as a whole dropped four points to 48.2 in the third quarter of 2002. Each of the four regions also registered lower scores than in the preceding quarter with the largest drop occurring in the Midwest where the RMI lost eight points and was rated at 46.7.
All four of the components that comprise the future expectations index also declined during the third quarter. Remodelers who participated in the RMI survey rated calls for bids at 46.8, amount of work committed for the next three months at 46, backlog of remodeling jobs at 49.1, and appointments for proposals at 50.8. The backlog of jobs component displayed the steepest decline, dropping by nine points from the second quarter.
