Remodeling Index Shows Little Improvement

Washington, DC, Oct. 29, 2010 -- The National Association of Home Builders said its Remodeling Market Index remained essentially unchanged at 40.8 in the third quarter, compared to 40.7 in the second quarter.

An RMI below 50 indicates that market activity is declining. The RMI has been running below 50 since the final quarter of 2005.

The overall RMI combines ratings of current remodeling activity with indicators of future activity like calls for bids.

"Consumers remain cautious about spending due to uncertainty in the economy high unemployment and scarce credit," said NAHB Remodelers Chair Donna Shirey, a remodeler from Issaquah, Washington. "Homeowners may be looking at remodeling but they are scared to take the leap."

The current conditions indices for the remodeling market remained stable in the Northeast, Midwest, and South. Major additions increased modestly to 45.8 (from 44.2), as did minor additions to 46.4 (from 45.8) and maintenance and repair to 37.1 (from 36.6).

The indices for future remodeling business stayed mostly level. Calls for bids slipped to 42.9 (from 46.2). Work committed for the next three months grew to 30.3 (from 27.9). The backlog of remodeling jobs dipped to 37.2 (from 37.7), and appointments for proposals declined to 41.9 (from 43.7).

"Remodeling continues to remain weak as consumers hold off on investing in their home until they feel more confident about the overall economy," said NAHB Chief Economist David Crowe.