When the going gets tough, most of us begin cutting back and take measures such as brown bagging, eating in, curtailing purchases, and embracing the DIY lifestyle. Another common occurrence is that homeowners put off buying up in favor of modifying and updating their current homes through remodeling. So as the economic downturn still hangs on like a bad cold that just won’t go away, are we spiffing up our spaces instead of moving on?
Each quarter, the NAHB is surveyed regarding remodeling activity. Factors such as current jobs, future contracts, and bid requests are examined. The report is known as the RMI, or Remodeling Market Index. A score below 50 implies that those in the remodeling market are reporting a decline in projects. On July 26, the NAHB released the findings from the second quarter’s survey.
The latest report shows that the RMI dropped two points from the first quarter to 45. In 2011, the index rose to 48, twice. To break down the results, the score for current market conditions declined 3 points-from 49 in the first quarter of 2012, to 46. The component measuring future indicators remained unchanged at 44.
Here’s a brief overview of the second quarter survey results:
- In regard to how favorable the remodeling market conditions were at the end of the second quarter, respondents rated them at 46 as opposed to the previous score of 49.
- As for future indicators, they were the same at 44.
- Regionally, scores were down in the Northeast (42) and Midwest (46) from the first quarter. The West remained the same at 47 and the South saw a 1-point gain with 47.
- Both the backlog of jobs and projected future activity saw gains from the previous quarter.
Those seeking to explain the sluggish remodeling market attributed a weak labor market in April and May, that saw no more than 80,000 jobs a month. There was cause for hope, however. In the second quarter report, it was revealed that both components that indicate future activity were up. The jobs backlog score rose from 43 to 46 and the amount of work that remodelers have committed to over the next three months rose from 42 to 43.
George “Geep” Moore Jr., the NAHB Remodelers Chairman, responded to the findings by saying, “Remodelers have some backlog of jobs and along with higher quality leads, this is making them cautiously optimistic about the near future.” He went on to add, “The positive outlook is constrained by continuing credit constraints and inaccurate appraisals that make customer financing difficult for big jobs like additions and whole house remodels.”
To track RMI visit: http://www.nahb.org/news.aspx?list=1§ionID=136