Remodeling activity slowed slightly in the second quarter, according to the NAHB’s Remodeling Market Index (RMI).
The current market conditions component slipped from 46.1 to 44.8 on a seasonally adjusted basis and the future expectations measure declined by more than two points to 44.1. The RMI measures remodeler perceptions of market demand for current and future residential remodeling projects. Any number over 50 indicates that the majority of remodelers view the market conditions as improving.
"While we have experienced some weakening in the remodeling market, activity has remained relatively steady," says the National Association of Home Builders (NAHB) Remodelers Chairman Mike Nagel, CGR, CAPS, a remodeler from Chicago. "We may have seen a decline in the number of major remodeling projects; however the market has been buoyed by an increase in the number homeowners requesting smaller scale projects and home alterations."
Regionally, the Northeast exhibited some improvement with RMI readings jumping from 43.4 in the first quarter to 49.5, and future expectations remaining relatively flat at 44.1 compared to the previous quarter reading at 44.3. Other regions of the country reported declines in their RMI components. Current conditions in the Midwest fell from 47.5 to 44.5 and future expectations moved from 44.7 to 43.7. In the South, current market conditions declined from 45.9 to 42.3 and future expectations moved from 50.7 to 45.0. While the West showed a decline in current conditions from 48.2 to 46.8, future expectations jumped from 45.0 to 46.0.
“Not surprisingly, the remodeling market is following the downswing we are seeing in the overall housing market,” says NAHB Chief Economist David Seiders. “We expect some further erosion in the second half of this year and in 2008, followed by a gradual recovery in 2009 and beyond.”
In the homeowner and rental components of the RMI, current activity for owner-occupied units remained flat at 47.5 compared to 47.7 in the first quarter, while the rental-occupied segment declined from 44.5 to 39.1. The future expectations for owner-occupied units decreased from 46.4 to 43.2, while the rental component declined from 41.4 to 37.3.
The RMI “special questions” section this quarter focused on aging-in-place remodeling work. Seventy-two percent of respondents said that their company is involved in home modification work relating to aging-in-place—up from 60 percent in 2006. According to the survey, respondents indicated that some of the most popular types of aging-in-place remodeling projects included installing grab bars (90 percent), higher toilets (75 percent) and curbless showers (63 percent), and widening doorways (56 percent). More than 75 percent of respondents noted an increase in the number of requests for aging-in-place features over the past five years. Respondents reported that the top reasons for their customers to undertake aging-in-place work included planning for future needs (78 percent), living with older parents (54 percent) and acute age-related disabilities.