Residential Remodeling Still Strong

Washington, DC, Dec. 12--Professional remodelers continued to enjoy strong demand for their services in this year’s third quarter, and most expect healthy business activity throughout the next several months, according to results of the National Association of Home Builders’ latest Remodeling Market Index (RMI), released today. "Low interest rates, rising home values and strong home sales are definitely contributing to the remodeling fervor among home owners," said NAHB Remodelors’ Council Chairman Mike Weiss, CGR, a remodeler from Carmel, IN. "In addition, the rebounding economy and rising consumer confidence are fueling substantial optimism among remodelers." The latest RMI is based on a quarterly survey of 434 professional remodelers, whose answers to a series of questions were assigned numerical values to calculate two separate indexes. The first index gauges current market conditions and is based on remodelers’ reports of major and minor additions and alterations, plus maintenance work and repairs, on both owner- and renter-occupied dwellings. The second index gauges expectations for the near future and is based on remodelers’ reports of their calls for bids, amount of work committed for the next three months, job backlogs and appointments for proposals. A variety of "special questions" are also asked at the end of the survey to help pinpoint market trends. Both indexes remained virtually unchanged in this year’s third quarter after registering substantial gains in the previous three months. The index gauging current market conditions slipped one-tenth of one point to 53.5, while the index gauging future expectations rose by the same margin to 54.9. However, year-over-year comparisons--which are more appropriate because the RMI is not seasonally adjusted--reveal substantial gains of 3.7 points for current market conditions and 6.7 points for future expectations. "The year-over-year gains in both indexes hold true for every region across the board, indicating the very broad-based strength of this market," said NAHB Chief Economist David Seiders. "What’s more, substantial year-over-year gains are apparent for every single component of the future expectations index--including calls for bids and amount of work committed for the next three months for both owner- and renter-occupied dwellings, plus overall job backlogs and appointments for proposals." The Northeast was the strongest region for professional remodeling in 2003’s third quarter, posting the highest RMI readings for both current market conditions and future expectations. While the Midwest, South and West all posted a slight decline from exceptionally robust RMI readings in the previous quarter, all four regions registered gains from their year-ago standings. Meanwhile, results of the "special questions" section of the RMI provide valuable insight into the typical general remodeler’s experience in the industry, educational background and company profile. "The vast majority of our members are longtime veterans of their profession who’ve built solid reputations and substantial credentials over the years," said Weiss. Indeed, 90 percent of survey respondents have been in the business for ten years or more; 59 percent have at least 20 years’ experience. About nine percent have between five and nine years of experience, while just one percent have been in business for two to four years, and a statistically insignificant number have less than two years’ experience. The typical general remodeler also boasts an impressive educational background. Of those surveyed, 78 percent either have a college degree or have completed at least some college training. Another ten percent have earned an advanced degree of some kind.