Washington, DC, May 25--Remodeling activity showed strong growth in the first quarter of 2005, according to the National Association of Home Builders’ (NAHB) Remodeling Market Index (RMI).
Today’s first quarter results were two points ahead of the seasonally adjusted fourth quarter of 2004.
"The RMI showed a nice rebound from some worse than normal weather this past winter, particularly in the Northeast and Midwest," said Remodelors Council Chairman Don Novak, CGR, CAPS, CGB, a remodeler from Cedar Rapids, Iowa.
The RMI is derived from a quarterly national survey of more than 500 remodelers and is seasonally adjusted. The current market conditions index grew two points, from 50.7 last quarter to 52.9. The future expectations index moved slightly lower from 54 to 53.6, but remained in the positive zone. Regionally, market conditions showed strong growth across the board except for the West.
The current market conditions in the Northeast grew from 46.7 in the fourth quarter of 2004 to 53.8; with a 1.3 point decline in future expectations during the same period.
The Midwest grew 2.9 points from last quarter to 48.9, and also showed a slowdown in future expectations from 48.8 to 47.6. The South continues to be a strong performer, growing from 52.9 to 58.4 and a 2.2 point growth in future expectations to 60.1. The West fell 5.1 points from last quarter to 53.6, with future expectations down 3.1 points to 54.2.
"We saw solid growth in the first quarter of this year and continued positive momentum into the next quarter," said NAHB Chief Economist Dave Seiders. "Calls for bids, amounts of work committed and backlogs of remodeling jobs are all up, leading us to expect continued healthy growth over the balance of 2005."
The market saw little change in major additions and alterations ($25,000 or more), moving from 49.88 to 50.19. However, the renter-occupied market – which makes up approximately one-third of all remodeling activity – showed strong growth with a more than five point gain from 34.45 to 39.7. Minor additions and alterations showed stronger growth, moving from 50.15 to 52.78, with the renter-occupied market again leading the charge on a seven point increase.
The RMI "special questions" section surveyed remodelers on in-house design services and their involvement with retailers and professional design dealers, such as Lowes and Home Depot. Of the 66 percent of remodeling companies that offer design services to customers, only six percent work with a retailer or professional design dealer to install or provide remodeling jobs. Of those that offer in-house design services, 57 percent employed a general designer, followed by interior designer, certified kitchen designer, or architect at 17, 15, and 15 percent respectively.
