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Remodeling activity remained steady during the first quarter of 2008, according to the National Association of Home Builders’ Remodeling Market Index (RMI).
The group’s market conditions indicator rose slightly, to 41.8 from 40.9 in the previous quarter. An index measuring future expectations remained unchanged at 37.9.
The Remodeling Market Index measures remodelers’ perceptions of market demand for current and future residential projects. Any number over 50 indicates that the majority of remodelers view the market conditions as improving. The NAHB noted that the index has been running below 50 since the final quarter of 2005.
“The remodeling market continues to show weakness, following the downturn in the overall housing market,” said NAHB chief economist David Seiders. “We expect there to be some further erosion in 2008, with a gradual recovery in 2009.”
Nationally, the RMI components for major additions and alterations during the first quarter increased to 44.15 from 42.28. Minor additions and alterations decreased to 41.57 from 41.76. Maintenance and repair remodeling work increased to 39.68 in the first quarter, from 38.11. The amount of work committed for the next three months decreased to 29.63 from 33.15 in the fourth quarter, “demonstrating a decline in the backlog of remodeling jobs,” the group said.
“Many remodelers are seeing smaller jobs and have a shorter backlog, but we expect activity to increase because necessary home repairs cannot be postponed for a long time,” said NAHB Remodelers chairman Lonny Rutherford.
Regionally, current market expectations dropped in the first quarter in the Northeast to 36.4 from 38.6, and in the South to 42.2 from 45.0. The Midwest, however, increased to 44.1 from 41.1, and the West was up slightly to 42.9 from 42.2.
The RMI is based on a quarterly survey of professional remodelers, whose answers to a series of questions were assigned numerical values to calculate the two separate indexes. Additionally, a variety of “special questions” are also asked at the end of the survey to help pinpoint market trends.